Fewer firms gave salary increases amid geopolitical uncertainty and easing inflation
Nominal wages of full-time resident employees grew by 4.9% at a slower pace in 2025 than 2024’s 5.6%, the Ministry of Manpower (MOM) reported on Thursday.
This comes amid Singapore’s overall inflation dropping sharply from 2.8% in 2024 to 0.7% in 2025, which MOM said could have contributed to reduced upward pressure on firms to raise nominal wages.
After adjusting for inflation, real wages actually grew by 4%, up from 3.2% in 2024, indicating that workers’ purchasing power went up.
Some 6,236 firms in the private sector with at least 10 employees were polled by MOM for this report.
More firms were profitable in 2025
In 2025, 83.1% of business establishments were profitable, up from 80.8% in 2024.
More firms reported stable or improved profitability in 2025 at 64%, an increase from 2024’s 62.6%.
Meanwhile, fewer firms reported a loss in 2025, at 16.9%, compared to 19.2% the year before.
Fewer firms gave salary raises
72.4% of firms raised their staff’s salaries in 2025, down from 78.3% in 2024. Those that did averaged a 5.8% wage increase, mostly to retain staff.
Nearly 1 in 4 firms kept wages unchanged, up from 18.5% in 2024, which MOM saw as “signs of greater prudence in terms of wages.”
Wage gains also broadened in 2025, with gaps in wage growth across employee groups narrowing.
Firms that cut wages remained around 3%, with reductions averaging 3.7%.
Sectors that saw the highest wage growth
Administrative and support services led wage growth at 7.5% in 2025 (though lower than 8.7% in 2024).
Accommodation saw the sharpest moderation in wage growth, from 5.5% in 2024 to 3.9% in 2025, as the post-pandemic hiring surge stabilised.
Insurance services and wholesale trade bucked the trend of overall slowing wage growth, with the former jumping from 4.9% in 2024 to 6.6% in 2025, as firms competed to hold onto staff.
Looking ahead, MOM expects real wage growth to stay positive but moderate.
Director of MOM’s Manpower Research and Statistics department, Ang Boon Heng told Channel News Asia that employers might be more cautious amid geopolitical uncertainty and inflationary pressures.
Ang added that wage growth could diverge more across sectors in 2026, with export-facing sectors under greater pressure from global tariffs.
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