Real wages in Singapore up 3.2% in 2024 but fewer firms plan increases this year: MOM
Real wages in Singapore up 3.2% in 2024 but fewer firms plan increases this year: MOM
SINGAPORE - Real wage growth in Singapore picked up in 2024 as inflation eased, but could slow down this year due to ongoing geopolitical tensions and global trade uncertainties, said the Ministry of Manpower (MOM).
Nominal total wages grew by 5.6 per cent in 2024 on the back of continued economic growth, which was comparable to the growth at 5.2 per cent in 2023.
After accounting for inflation, which eased from 2023, r eal wages grew 3.2 per cent in 2024, up from 0.4 per cent in 2023, said MOM in its annual wage practices report released on May 28.
MOM's forward-looking survey conducted in the first quarter of 2025 indicated a decline in the share of firms planning wage increases. The proportion of firms intending to do so dropped to 22 per cent in March 2025 from 32 per cent in December 2024.
'These trends point to a potential moderation in nominal wage growth in 2025 compared to 2024, especially in trade-reliant sectors such as manufacturing and wholesale trade,' MOM said.
The ministry said eight in ten establishments remained profitable in 2024, just slightly lower than 82.1 per cent in 2023.
The manufacturing sector saw an increase in profitable firms, while real estate services, construction and wholesale trade did not fare as well.
The ministry noted that while more firms raised their employees' salaries in 2024, they did so to reward past organisational performance, rather than to signal forward-looking confidence.
Only 3.2 per cent of the firms surveyed cut wages in 2024, down from 6.5 per cent in 2023.
MOM said there is continued demand for skilled workers in sectors like the administrative and support services, financial services, as well as community, social and personal services.
The administrative and support services reported the highest wage growth at 8.7 per cent i n 2024, largely due to the Progressive Wage Model. This was followed by the financial services at 6.7 per cent, and the community, social and personal services at 5.7 per cent.
But wage growth in the manufacturing and wholesale trade industries were below average, coming in at 5.1 per cent and 4.2 per cent respectively, due to the ongoing geopolitical and trade tensions. These two trade-reliant sectors are expected to further moderate in 2025.
Rank-and-file workers and junior management employees experienced slightly higher wage growth at 5.8 per cent and 5.6 per cent respectively, as compared to senior management at 5.1 per cent.
'Policy factors, such as increases in the local qualifying salary and the implementation of Progressive Wage Model initiatives have also contributed to higher wage increases among lower-income employees,' the ministry said.
Meanwhile, 76 per cent of firms have adopted some form of flexible wage system, said MOM. This means they have either included a monthly variable component (MVC) or an annual variable component (AVC) into their wage structure.
However, the share of firms which have fully adopted the flexible wage system remained low at 8.5 per cent.
Firms that adopted at least one FWS component reported higher wage growth than those that did not. 'They were able to adjust the variable components to offer bonuses to employees during periods of good economic growth,' MOM said.
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