Labour Market Report 1Q 2026: Resident employment strengthens despite cautious hiring outlook

• Resident employment rose by 5,400 in 1Q 2026, marking Singapore’s 18^th consecutive quarter of growth.

• AI adoption accelerates, but firms are three times more likely to redesign jobs than reduce headcount according to MOM.

• Job vacancies continued to outnumber unemployed persons, with 146 vacancies for every 100 jobseekers.

• Unemployment remained low and stable, with more retrenched workers successfully finding new jobs.

• While employers are becoming more cautious amid global uncertainty, retrenchments remain within non-recessionary norms.

Total employment in Singapore grew by 9,400 in the first quarter of 2026, marking the 18^th consecutive quarter of labour market expansion since the fourth quarter of 2021.

These were the findings of the Ministry of Manpower’s (MOM) Labour Market Report First Quarter 2026 released on 15 June 2026.

While the pace of overall employment growth eased from the previous quarter, resident employment gains strengthened, reflecting sustained demand for local workers even as non-resident employment growth moderated.

Job vacancies also continued to outnumber unemployed persons despite signs of a moderation in hiring activity.

Resident employment growth

During a company visit to Star Furniture Pte Ltd, Manpower Minister Tan See Leng highlighted that resident employment increased by 5,400 in the first quarter, up from 3,100 in the previous quarter.

“While some outward-facing sectors such as manufacturing and financial services have seen a slight increase in retrenchment, overall levels remain within non-recessionary norms,” said Dr Tan.

Growth in resident employment was led by sectors such as administrative and support services, transportation and storage, and public administration.

MOM noted that administrative and support services recorded gains largely in employment activities and travel-related services, while transportation and storage also continued to expand.

Meanwhile, non-resident employment growth was concentrated in construction and manufacturing, although it moderated compared to the previous quarter.

The ministry added that while overall employment growth has become less broad-based, more sectors are still adding jobs compared to a year ago.

Unemployment stayed low

Unemployment remained low and stable in March 2026, with the overall unemployment rate at 2 per cent. Resident and citizen unemployment rates held at 2.9 per cent and 3.1 per cent respectively.

Resident long-term unemployment also remained unchanged at 0.9 per cent, suggesting continued stability in job prospects.

Among younger workers aged below 30, unemployment edged up from 5.8 per cent to 6.2 per cent over the quarter. MOM said this likely reflects more frequent transitions between short-term jobs rather than a broad-based shortage of opportunities.

Older workers continued to fare well, with unemployment among those aged 60 and above staying relatively low at 1.8 per cent.

Vacancies continued to outnumber job seekers

Labour demand remained firm, although there were signs of easing.

Job vacancies dipped from 77,700 in December 2025 to 73,300 in March 2026, driven mainly by a decline in non-PMET vacancies.

Even so, there were still more vacancies than unemployed persons.

The job vacancy-to-unemployed ratio stood at 1.46 in March 2026, meaning there were roughly 146 available jobs for every 100 unemployed individuals.

Demand for skilled workers also remained healthy, with increases in PMET vacancies and higher demand in sectors such as financial services and manufacturing.

Retrenchments remained within non-recessionary norms

Retrenchments increased slightly from 3,690 in the previous quarter to 3,830 in 1Q 2026. The rise was concentrated in external-oriented sectors including manufacturing, financial services and professional services.

However, the incidence of retrenchment remained low at 1.6 per 1,000 employees, below the pre-pandemic non-recessionary average of 1.7 per 1,000 employees.

Business restructuring and reorganisation continued to be the main reason for retrenchments, accounting for nearly three-quarters of cases.

The outlook for retrenched workers also improved. The share of resident workers who found employment within six months of retrenchment rose for the second consecutive quarter, climbing from 57.4 per cent in 4Q 2025 to 60.7 per cent in 1Q 2026.

“What encourages me is that we are seeing more retrenched workers finding their way back into employment,” said Dr Tan.

AI reshapes jobs more than headcount

According to the ministry’s survey, 28.5 per cent of firms adopted AI in 2025, with the highest adoption rates recorded in information and communications (74.1 per cent), professional services (57.5 per cent), and financial and insurance services (56.4 per cent).

However, only a small minority of firms reported AI-related reductions in headcount or hiring, at 6.2 per cent. Instead, AI has so far had a greater effect on how work is performed, with 18.9 per cent of firms reporting that they had redesigned job functions because of the technology.

MOM said the findings suggest AI is currently driving changes to work processes and job redesign rather than causing widespread job displacement.

Dr Tan said: “MOM’s survey found that firms were about three times more likely to redesign jobs and work processes than reduce headcount or hiring because of AI.”

Labour market outlook

Looking ahead, MOM expects the labour market to remain resilient, although employers may take a more cautious approach to hiring and wage increases amid heightened global economic uncertainty and geopolitical tensions.

Business surveys cited in the report showed a decline in the proportion of firms planning to hire or raise wages over the next three months, reflecting greater caution in the external environment.

Even so, MOM said Singapore’s labour market continues to be supported by sustained economic growth and ongoing efforts to help workers adapt to changes brought about by technology.

The ministry encourages workers to tap on initiatives such as SkillsFuture courses, career coaching services by Workforce Singapore and NTUC’s e2i (Employment and Employability Institute), as well as new AI-focused training programmes, to strengthen their skills and remain competitive in the evolving job market.

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