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The central bank said the overall business outlook has softened and employment growth is expected to ease from the gains seen in 2025.
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Advertisement Hiring, wage growth likely to ease in 2026 due to Middle East conflict: MASThe central bank said the overall business outlook has softened and employment growth is expected to ease from the gains seen in 2025.
Office workers in Singapore's central business district on Apr 16, 2024. (Photo: CNA/Raj Nadarajan)
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Abigail Ng
Abigail Ng
14 Apr 2026 03:00PM
(Updated: 14 Apr 2026 07:27PM)
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SINGAPORE: Amid growing uncertainties from the Middle East conflict, companies could become more cautious in hiring extra manpower in 2026 and salary increments are likely to be smaller than the previous year, said the Monetary Authority of Singapore (MAS) on Tuesday (Apr 14).
In its latest quarterly macroeconomic review, MAS cited a business optimism index conducted by the Singapore Commercial Credit Bureau during the outbreak of the war and said that the overall business outlook has softened slightly.
"With the anticipated slowing of the economy, employment growth is expected to ease from the gains in 2025, with non-resident employment growth adjusting in tandem," MAS said.
Meanwhile, resident employment growth should continue to be sustained by hiring and vacancies in the domestic-oriented and modern services sectors.
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For example, in sectors such as health and social services, public administration and education, labour demand continues to be "structurally sound", said the report.
There are also unfilled vacancies for skilled workers in technology and engineering-related roles as technology develops rapidly, MAS noted.
As for companies in sectors that are more significantly affected by energy shocks, MAS said they could pull back on hiring, but the market should remain balanced.
WAGE GROWTH
Amid a softer labour market, MAS said nominal resident wage growth is projected to moderate this year compared with 2025.
Nevertheless, pre-announced pay increases and increases driven by policies like the Progressive Wage Model should provide some support to average wages.
However, the central bank also warned that a prolonged or deeper-than-expected economic slowdown could lead to a worse outcome for the labour market.
Hiring plans could be scaled back more substantially and retrenchments could rise, along with a more pronounced moderation in wage growth said MAS.
MAS' projections come after Singapore's labour market recorded a stronger second half of 2025.
Total employment expanded by 17,700 in the fourth quarter of 2025, with almost half the increase for the full year attributed to non-resident construction workers.
Excluding construction workers, total employment growth was broadly stable, and resident employment expanded at a firmer pace in 2025 compared with 2024.
Resident employment growth was largely concentrated in the domestic-oriented services and modern services clusters, including retail, food and beverage, and administrative and support services sectors.
MAS' report comes a week after three ministerial statements on Singapore's response to the Middle East conflict were delivered in parliament.
Manpower Minister Tan See Leng previously said the government's first priority amid the conflict in the labour market is to support fresh graduates, who may be affected by artificial intelligence disruptions.
He was responding to a question about whether the government would consider a temporary freeze on foreign worker levies given the escalating cost of energy.
Dr Tan said the government is monitoring the situation closely but suggested that cutting away the levy could set Singapore backwards.
Related:
Inflation expected to ease in 2027 but prolonged Middle East conflict may keep prices high, slow growth: MAS
Source: CNA/an(nj) NewsletterWeek in Review
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