Singapore’s job growth set to slow as AI changes hiring demand

Singapore’s employment growth is forecast to slow to 35,000 jobs in 2027, as AI-led and capital-intensive growth puts less pressure on employers to expand their workforces, according to Maybank.

The forecast compares with 55,500 jobs added in 2025 and an estimated 40,000 in 2026. Resident employment growth is also expected to slow to 10,000 in 2027, from 11,600 in 2025.

The outlook comes despite real GDP growing 6.1% year on year in the first half of 2026. Employment excluding migrant domestic workers increased by 20,800 during the period, while resident employment rose by 7,600.

AI and employment

Maybank said the current economic cycle is more dependent on AI and capital-intensive investment, which is generating fewer jobs than previous periods of strong economic growth, particularly in modern services.

“The Singapore economy is running hot on the AI boom, but the job market, paradoxically, appears to be cooling,” the bank said.

Employment across financial, professional and infocomm services increased by 1,300 jobs in the second quarter of 2026, following contractions in the previous two quarters.

By comparison, average annual employment growth reached 133,000 during the 2004-07, 2011-13 and 2021-22 periods, while resident employment grew by an average of 60,100.

Hiring slows

Other labour market indicators also point to weaker hiring and job movement. Retrenchments rose to 4,600 in the second quarter, the highest level since the fourth quarter of 2020, with services accounting for most job cuts.

The monthly recruitment rate fell to 1.4%, its lowest level outside the pandemic years, while the monthly resignation rate declined to 1%.

Maybank described the labour market as “low-hire, low-quit”, reflecting weaker recruitment and employee movement alongside higher retrenchments.

Cautious workforce plans

Employer hiring intentions also remain subdued. ManpowerGroup’s fourth-quarter Net Employment Outlook was unchanged from the previous quarter but lower than a year earlier.

A Singapore National Employers Federation survey found that 54% of companies do not plan to increase headcount in 2027, while another 6% expect to reduce their workforce.

Maybank said existing government support could be expanded as retrenched workers face potentially longer periods before returning to employment. Measures currently include SkillsFuture Jobseeker Support, which provides eligible unemployed individuals with up to S$6,000 over six months, as well as traineeships, career transition support, job placement services and Career Conversion Programmes.

The bank also suggested raising the current S$5,000 monthly income ceiling and extending the duration of financial support under the Jobseeker Scheme.

“Besides job security and unemployment, these structural shifts may have implications for retail spending; residential and commercial property demand; demographics; and widening income disparities,” the bank said.