Singapore’s labour market to remain tight: experts

Half of companies still looking to hire more employees.

Singapore’s tight labour market conditions will likely persist as demand for talent remains strong and the economy continues to improve.

In a recent note, economists at Nomura said their Labour Market Conditions Indicator for the Lion City picked up in the first quarter after easing from its peak over the past seven quarters.

The analysts said the trend reflects strong wage growth for the workers with the average monthly earnings currently surpassing pre-pandemic levels.

Citing the latest survey by the Ministry of Manpower (MOM), Nomura said there is still strong demand for labour as the share of companies looking to hire more workers in the next quarter rose to 50.7% in Q1 from 47.7% previously.

The ratio of job vacancies to unemployment also stayed above 1% even after it slipped to 1.6% in the first quarter from 1.7% previously. The volume of job vacancies continued to rise for the second consecutive quarter.

Retrenchments are also slowing down, falling to 3,030 in Q1 from 3,460 previously.

Employment across the city-state expanded by 4,700 in Q1, although unemployment rate continued to inch up to 2.1% in March, according to MoM’s data.

“Given the improving economic outlook and labor market conditions, we continue to expect underlying wage pressures to persist in coming months, supporting our long-held view that core inflation will remain sticky,” Nomura said.