Singapore job market 'appears to be cooling' despite strong economic growth amid AI boom: Maybank

SINGAPORE: Singapore’s strong economic growth amid the artificial intelligence (AI) boom may have rebounded consumer confidence and made retail investors betting on the industry optimistic, but it seems it’s not giving the same confidence to the city-state’s job market.

According to a Maybank report, cited by Singapore Business Review, while the city-state’s economy is “running hot on the AI boom”, the job market, paradoxically, appears to be cooling.

The bank said Singapore’s economic growth, currently driven by AI and capital-intensive industries, is producing far fewer jobs, particularly in modern services.

Singapore’s economy grew 6.1% year-on-year (YoY) in the first half of 2026, but employment excluding migrant domestic workers only rose by 20,800 and resident employment by 7,600. By comparison, employment increased by an average of 133,000 a year during 2004 to 2007, 2011 to 2013 and 2021 to 2022, while resident employment grew by an average of 60,100 a year.

In the second quarter (Q2) of 2026, financial, professional and infocomm services added just 1,300 jobs after shrinking in the previous two quarters.

At the same time, retrenchments rose to 4,600, the highest level since Q4 2020, with services accounting for most of the job cuts, while the monthly recruitment rate fell to 1.4%, its lowest level outside the pandemic years. The resignation rate also hit a record-low 1% in the quarter.

Maybank’s report described the labour market as “low-hire, low-quit” and expects it to remain subdued despite continued gross domestic product (GDP) growth.

The report forecasts employment excluding migrant domestic workers to grow by 40,000 in 2026 and 35,000 in 2027, down from 55,500 in 2025, while resident employment is projected to increase by 12,000 and 10,000 respectively, compared with 11,600 in 2025, which would be the most subdued figures since 2021.

The bank added that these changes in the labour market may have implications for retail spending, property demand, demographics and income inequality.

In August, experts, including Maybank Securities Singapore economist Brian Lee, explained why Singapore workers feel as if they’re not benefiting from the city-state’s strong economic growth. The answer, they said, could partly lie in the economy’s “K-shaped growth”, as AI and technology-related industries are pulling ahead while other industries lag behind. /TISG

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