Singapore’s labour market is experiencing a period of low firing, hiring, and quitting, according to the latest report from UOB Global Economics and Markets Research. The Labour Market Pressure Index (LMPI), developed by UOB, indicates a stable yet slightly slackening job market in the first quarter of 2025 compared to the previous quarter.
The LMPI, which uses two methodologies—equally-weighted Z-score and Principal Component Analysis (PCA)—shows that the labour market’s tightness has decreased since its peak in the second quarter of 2022. This decline is attributed to the post-pandemic rebound stabilising by mid-2024. The index incorporates ten labour market indicators, including unemployment rates and job vacancies, to assess market conditions.
Despite the overall unemployment rate remaining low at 2.0% in Q1 2025, the report cautions that some slack is emerging. The job vacancies to unemployed persons ratio stood at 1.64, unchanged from the previous quarter, yet higher than the 2018-2019 average of 1.00. This suggests a cautious outlook as employers may be hesitant to hire amidst economic uncertainties.
The LMPI also highlights a positive correlation with the Monetary Authority of Singapore’s core and services Consumer Price Index (CPI), indicating that a tight labour market could lead to increased consumer prices due to wage pressures. As the labour market shows signs of slack, UOB warns of potential rapid deterioration, drawing parallels to past economic downturns.
In summary, whilst Singapore’s labour market remains relatively healthy, emerging slack and cautious hiring practices signal potential challenges ahead.
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