Singapore’s labour market continued to expand in Q1 2024, albeit at a moderated pace relative to previous quarters, according to the latest data from the Ministry of Manpower.

Total employment (excluding Migrant Domestic Workers) grew by 4,900 in Q1 2024, lower than the previous quarter (7,500). The employment growth this quarter was supported by an increase in resident employment. This increase in resident employment was higher than that in the previous quarters in 2023, and was comparable to resident employment growth in non-recessionary periods.

Non-resident employment contracted for the first time since Q3 2021 due to cooling labour demand. Nevertheless, applications for higher-skilled non-residents, i.e. Employment Pass holders, have picked up in tandem with improved business expectations.

The increase in resident employment was mainly in growth sectors such as financial services and health & social services, as well as public administration & education. Employment growth in these sectors outweighed the seasonal declines in retail trade, food & beverage services and accommodation following the end of the festive period.

The decline in non-resident employment was mainly in construction (mostly work permit holders), which accounts for a significant proportion of work permit holders. Employment in the sector fell for the first time since Q4 2021, as construction firms adapted to the reduction in the sector’s Dependency Ratio Ceiling (the maximum ratio of foreign workers to the total workforce that a company in a given sector can employ) from 1:7 to 1:5, with effect from 1 January 2024. Smaller declines were also seen in outward-oriented sectors such as manufacturing and information & communications.

In terms of unemployment, unemployment rates edged up slightly in March 2024 (overall: 2.1%; residents: 3.0%; and citizens: 3.1%), but remained within the range observed during non-recessionary periods. The increase was not unexpected, the Ministry added that it had previously highlighted that unemployment rates could edge up amid higher layoffs in Q3 and Q4 2023.

“However, we do not expect sustained increases in unemployment rates, given continued labour market tightness,” the Ministry stated.

Meanwhile, layoffs fell for the second consecutive quarter to 3,000 in Q1 2024 from 3,460 in Q4 2023. Business reorganisation/restructuring remained the top reason for layoffs in Q1 2024, as businesses press on with transformation efforts.

The Ministry’s forward-looking polls also suggested improved hiring demand, with 50.7% (up from 47.7%) of firms indicating an intention to hire in the next three months. However, wage improvements could slow, as the proportion of firms with an intention to raise wages declined from 32.6% to 26.1%.