⁠GDP is growing—so why does it feel like there are “no jobs everywhere” in Singapore?

GDP growth doesn’t necessarily mean better job prospects

Singapore’s gross domestic product (GDP) is growing, offering a rare moment of optimism in a turbulent global economy. 

As 2025 draws to a close, the Ministry of Trade and Industry has raised its full-year growth forecast to around 4% after stronger-than-expected performance in Q3, with the first three quarters averaging 4.3% growth year-on-year.

On the other hand, unemployment remains low as well, with the Ministry of Manpower reporting an overall unemployment rate of 2.0% for the third quarter of this year.

But on the ground, both graduates and mid-career workers feel a very different reality. They describe scarce job listings, sluggish hiring, and a growing sense of job insecurity.

However, pieces of the puzzle don’t seem to fit: why hasn’t the wealth of the world’s richest country by GDP per capita in 2025 translated into healthier job prospects?

The key drivers of Singapore’s GDP growth

Much of the momentum driving Singapore’s GDP growth comes from manufacturing, wholesale trade, and finance & insurance sectors, buoyed by strong global demand for semiconductors, servers, and related products.

These are high-value industries that contribute billions to the economy while employing relatively few jobs. For instance, the semiconductor manufacturing industry, accounting for 6% of Singapore’s US$547.39 billion GDP in 2024, only employs around 35,000 people.

Moreover, employment gains in 2024 were also concentrated in these higher-skilled sectors, while labour-intensive sectors like retail, food & beverage, and administrative services saw little growth—or even declines.

In other words, GDP can grow on paper without creating more opportunities for the average worker.

This has created what the Association of Small and Medium Enterprises describes as a “two-speed economy”: while high-value sectors expand rapidly, labour-heavy, locally focused industries lag behind, keeping domestic consumption sluggish and highlighting the gap between Singapore’s overall economic performance and the everyday realities faced by workers.

More companies are replacing manpower with software

A decade ago, “growth,” for companies, meant hiring more staff. Today, it means automation: AI customer support, self-checkout kiosks, robotic warehouses, cloud accounting, and AI-generated marketing.

For companies and, indirectly, for Singapore, this is a win.

Automation lowers costs and boosts output—McKinsey estimates that tasks occupying 60 to 70% of employees’ time, especially in customer operations, software engineering, marketing and sales, and R&D, are highly automatable—and these productivity gains power the city-state’s GDP growth.

As companies adopt these tools, headcount barely changes—and in some cases, even decreases. Firms, including global tech giants, are trimming staff and restructuring teams to maximise efficiency with technology.

GDP can rise even as fewer humans are needed, because technology is doing more of the work.

Firms are more cautious about hiring in 2026

GDP shows what happened last quarter, but hiring reflects what business leaders expect for the year ahead.

While Singapore’s unemployment rate remains low, job postings have been steadily declining throughout 2025.

According to a report from Indeed, postings fell 3.1% in Oct, extending a three-year downward trend. This marks the eighth consecutive monthly decline this year, with overall job ads now 17.9% lower than a year ago.

The slowdown comes as firms brace for volatility: global demand swings, high interest rates, rising costs, and AI reshaping entire job scopes. In fact, hiring sentiment in Singapore is expected to slow significantly in the first quarter of 2026, dropping to its lowest level since 2022.

So, businesses are freezing hiring to stay flexible. A recent Singapore National Employers Federation survey found that nearly three in five Singapore firms are planning to do so next year.

More employers are also offering contract roles instead of permanent ones to manage costs.

Singapore’s workforce is hitting structural limits

To understand why GDP growth doesn’t always translate into more jobs, it also helps to look at Singapore’s workforce as a whole.

It is facing structural limits: birthrate is declining, and Singaporeans are ageing with around a third estimated to be aged 65 and above by 2035.

Foreign manpower is tightly controlled, too. Even when companies want to hire, the talent pool isn’t always there, pushing firms to grow through productivity instead of people.

GDP growing doesn’t mean companies need more workers—it just means they’ve found a way to grow without them.

• Read other articles we’ve written on Singaporean businesses here.

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