Real wages growth remains at 0.4%
The growth of real wages in Singapore remained at 0.4% in 2023 as nominal wage growth slowed amid fewer employers offering wage increases during the year, according to the latest data from the Ministry of Manpower (MOM).
Nominal wage growth was at 5.2% in 2023, slower than the previous year's 6.5%, revealed MOM's Report on Wage Practices 2023.
"Wages continued to grow, albeit at a more moderate pace compared to 2022," MOM said. "This could be attributed to the proportion of profitable establishments staying high and a majority of establishments continuing to provide wage increases to their employees."
According to the report, the share of profitable businesses remained high at 82.1%, but the slower economic growth held back some organisations from offering wage increases.
"As a result, the proportion of establishments which gave wage increases to their employees declined from 72.2% in 2022 to 65.6% in 2023," MOM said.
Employers that introduced pay cuts remained at 6.5% in 2023, according to the report, while those that retained wages was at 27.9%.
Wage growth by employee type, industry
Despite the slower wage growth reported, MOM found that all types of employees and industries continued to see wages going up in the previous year.
By employee type, junior management employees received the highest average wage growth with 6.3%. Senior management staff logged the lowest with only 4.6%, slightly slower than the 4.8% increase for rank-and-file employees.
By industry, the accommodation and real estate services sectors reported the highest wage increases with eight per cent, much higher than the 5.2% average.
The manufacturing industry recorded the slowest growth, with only four per cent of wage increase for 2023.
Wage forecast for 2024
In 2024, MOM said they are expecting nominal wage growth to remain similar to 2023, with real wages to see an improvement as inflation is also "expected to stay on a gradually moderating trend."
The strong demand for employees in the Information and Communications, Financial Services, Professional Services, as well as Health and Social Services could deliver higher wage growth in the sectors this year, according to the ministry.
"However, with an uncertain business environment, establishments might adopt a cautious stance with respect to wage increases," MOM said.
Singapore's National Wages Council is expected to convene in 2024 to discuss the wage guidelines for 2024/2025.