Labour market strengthens in third quarter of 2025 amid economic growth, but hiring sentiment softens

According to the Labour Market Report for the Third Quarter 2025, released by the Ministry of Manpower (MOM) on Thursday (11 Dec), Singapore’s labour market expanded at a faster pace, supported by sustained economic growth.

Total employment (excluding migrant domestic workers) grew by 25,100 in Q3 2025, more than doubling the gain of 10,400 in Q2. This marked the 16th consecutive quarter of employment growth since Q3 2021.

The increase comprised 5,600 resident and 19,500 non-resident jobs. Resident employment was mainly driven by Financial & Insurance Services and Health & Social Services, while non-resident employment growth came from the Construction and Manufacturing sectors.

The Employment Diffusion Index (EDI), which tracks how widely employment gains are spread across sectors, rose from 56.2 in Q2 to 58.9 in Q3, indicating broad-based labour demand.

Unemployment steady, but long-term joblessness up among youth

Unemployment rates in September 2025 remained stable: overall at 2.0%, residents at 2.8%, and citizens at 3.1%. However, long-term unemployment among residents under 30 rose to 1.3% from 0.9% in Q2, likely due to prolonged job searches by youth seeking roles in higher-paying sectors.

Nonetheless, graduate outcomes improved. The employment rate for 2025 graduates rose to 69.9% in September, from 51.9% in June, while unemployment for the cohort fell from 39.0% to 16.4%.

Long-term unemployment also edged up among tertiary-educated jobseekers, despite steady overall unemployment.

Retrenchments low, though re-entry rates dipped

Retrenchments remained low at 3,670 (1.6 per 1,000 employees) in Q3 2025. However, the six-month re-entry rate among retrenched residents declined to 55.4% from 56.3% in Q2. For those retrenched a year prior, re-entry rose to 74.2%, up from 71.2% in Q2.

Retrenchments were concentrated in Financial Services, Professional Services, and Information & Communications — sectors undergoing restructuring despite being growth areas.

Additionally, 800 employees were placed on short work-week or temporary layoff arrangements, up from 620 in Q2. Most cases were in the Manufacturing sector, notably Electronics and Machinery.

Job vacancies down as labour market tightness eases

The number of job vacancies declined from 76,900 in June to 69,200 in September — marking a continued easing from the tight labour conditions of 2021–2022.

Despite this, there were still more job vacancies than job seekers. The job vacancy-to-unemployed-person ratio rose to 1.49 in September 2025, reflecting fewer unemployed persons overall.

PME roles remained in demand, with 23,000 vacancies in September, up from 20,400 a year ago. These were mainly in Information & Communications, Health & Social Services, and Transportation & Storage.

Non-PME vacancies, although more numerous, remained hard to fill due to physical demands, irregular hours, and shift work.

Firms show cautious hiring and wage outlook for 2026

Forward-looking indicators point to a softening labour market. According to the MOM’s business expectations data, fewer firms planned to hire or raise wages in the three months following September 2025. The proportion of firms expecting redundancies also increased, from 1.9% in June to 2.3% in September.

Outward-oriented firms showed stronger hiring intent than domestic-focused ones, though they were less inclined to offer wage increases.

This moderation comes despite stronger GDP performance. The Ministry of Trade and Industry revised Singapore’s 2025 GDP forecast to “around 4.0%”, up from the previous range of 1.5% to 2.5%, following a better-than-expected Q3 economic expansion of 4.2% year-on-year.

Government support for employers, workers and jobseekers

In response to global headwinds and structural labour shifts, the Government reaffirmed its support for workforce transformation:

• Employers can tap on Career Conversion Programmes and the Productivity Solutions Grant – Job Redesign (PSG-JR) scheme. In 2026, the SkillsFuture Enterprise Credit will be refreshed with S$10,000 to offset costs of workforce upgrading.

• Workers can access training and career guidance through Career Health SG, the CareersFinder tool on MyCareersFuture, WSG, NTUC’s e2i, and SkillsFuture Level-Up courses.

• Fresh graduates can apply for GRaduate Industry Traineeships (GRIT) via MyCareersFuture and Careers@Gov.

• Involuntarily unemployed individuals may receive up to S$6,000 in temporary support through the SkillsFuture Jobseeker Support Scheme, launched earlier this year.