Singapore’s labour market remains characterised by weak job creation and slowing wage growth. According to the most recent Manpower of Ministry's (MOM) unemployment report, unemployment in Singapore has risen slightly from 2.8 percent in 2015 to 3.0 percent in 2016.
The corporate sector is unlikely to resume hiring or increase wages on a meaningful scale until unit labour costs deflate and corporate profitability is restored. The soft labour market is likely to keep private consumption subdued.
Singapore’s economy contracted in Q4 2016, the first since the global financial crisis. The Monetary Authority of Singapore (MAS) also emphasised in its October policy statement that weak private consumption is likely to weigh on core inflation which is likely to remain contained.
"We believe these difficult labour market conditions are likely to persist," said ANZ in a report.
