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Wages in S’pore forecast to rise 3.9% in 2018: Survey

SINGAPORE — Workers here can expect a marginally higher salary increase next year compared with the one they got this year, according to a new survey which illustrates the cautious mood in the job market.

SINGAPORE — Workers here can expect a marginally higher salary increase next year compared with the one they got this year, according to a new survey which illustrates the cautious mood in the job market.

The survey of 850 businesses across 14 industries in Singapore by global consultancy firm Mercer showed that wages could rise by an average of 3.9 per cent next year. Wages climbed 3.7 per cent on average this year, the firm’s findings showed.

Next year’s wage growth is also expected to be uneven across various sectors. The life sciences industry, for instance, is forecast to see the highest wage increase (4.1 per cent) next year, after wages rose an average of 3.9 per cent over the last two years.

Other sectors projected to see larger pay hikes include lifestyle and retail, as well as aerospace (both 4 per cent). The consumer goods, high-tech, and chemical industries are projected to see wage increases of 3.9 per cent.

The sectors that are set to see lower pay rises than before include life insurance (3.9 per cent, down from 4.6 per cent), Internet (3.7 per cent, down from 4.4 per cent) and banking (3.3 per cent, down from 3.7 per cent).

The figures from the survey do not account for inflation.

Economists told TODAY that the survey findings suggest that employers in Singapore could still be treading with caution, even as economic conditions improve.

Economic growth this year is expected to be better than previously thought, with the Government recently raising its full-year forecast for 2017 to between 3 and 3.5 per cent — up from 2 to 3 per cent.

Singapore’s economy is expected to grow 1.5 to 3.5 per cent next year.

“At this juncture, maybe employers are still a bit cautious ... What may happen is if the economic-recovery story continues to firm, then the labour market may see some upward pressure,” said OCBC Bank’s treasury research and strategy head Selena Ling.

The varying wage growth forecasts across sectors reflect the continued unevenness in economic recovery and demand for workers, added CIMB Private Banking economist Song Seng Wun.

Ms Ling pointed out that the sectors set to see more modest wage increases, such as life insurance, real estate and banking, are those which have experienced considerable technology-led disruptions to traditional roles.

On the flip side, the demand for workers with specialised skills in sectors like life sciences is driving up wages, she added.

Mercer’s global compensation planning report and total remuneration survey, conducted in the second and third quarters of this year, also spanned other economies, including those in the Asia-Pacific region.

Next year, Bangladesh (10 per cent), India (9.8 per cent) and Vietnam (9.1 per cent) are projected to see the biggest wage increases.

At the other end of the spectrum are Japan (2 per cent) and Australia and New Zealand (both 3 per cent), which are forecast to register the lowest pay rises.

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