Disclaimer: Unless otherwise stated, any opinions expressed below belong solely to the author. Data sourced from the Economic Development Board and Singapore Department of Statistics.
After a turbulent 2025, following the return of Donald Trump to the White House and the wave of trade tariffs the US unleashed on the world, 2026 offered a promise of greater stability. Singapore weathered the storm exceptionally well, bouncing up to a 5% GDP growth, despite fears of a global recession, raising expectations for the new year as well.
Unfortunately, another geopolitical event shook the world on Feb 28, when the US and Israel decided to deal a final blow to the Iranian regime, leading to massive disruptions in oil and gas trade from the Persian Gulf and sending global energy prices soaring.
Since all economies depend on fuel and electricity, virtually every area of our activity is affected. It should be no surprise, then, that the city-state’s business outlook for the coming months has taken a tumble as a result.
Services reeling from fear, manufacturing still supported by AI
Expectations of Singapore-based businesses for the next six months are overwhelmingly negative. Only four industries expect an uptick in activity, with the rest firmly in the red (the figures show the net weighted percentage of positive/ negative answers collected by EDB and Singapore Department of Statistics in their quarterly surveys).
Local manufacturing is, fortunately, still on life support, thanks to the ongoing tech boom in Artificial Intelligence, which is keeping demand for semiconductor products and related sectors high.
Interestingly, the IT rally has been more than enough to offset the suffering of other manufacturing sectors, boosting the overall average:
You can see it reflected in employment forecasts as well, as manufacturing is expected to look for more employees than before. The caveat, of course, is that the demand is highly uneven and driven by a potential bubble which may suddenly burst, leaving thousands of people out of a job overnight.
Employment plans collapse
While this dire prediction about AI frenzy is still a ‘maybe,’ job prospects in services—where a large majority of Singaporeans are employed—are already very grim.
For comparison’s sake, let’s start with what the figures showed in the first quarter of the year:
All but two industries expected increased hiring, having just had a really strong 2025, against the odds and fears.
Now, however, let’s look at what Singapore employers are saying today:
As you can see, the mood has shifted entirely. Only those in Recreation & Personal services expect to bring more people on board (although it’s hard to say how many of these jobs are directed to Singaporeans).
Not even the lucrative Finance industry is being spared this time, and may see job cuts instead of hiring this quarter.
To understand just how big a shift it is, just look at the collapse in sentiments between the two quarters:
With the exception of Real Estate, which is somewhat insulated from the global turmoil (cooling measures for foreign buyers have been in place for a while already, while the local market remains stable and predictable), every other industry has seen a decline in expected hiring activity.
Retail trade appears to be worst hit, having dropped sharply, by 35 percentage points, from a net positive 12 to negative 23.
That said, virtually everybody is less optimistic than they were at the start of 2026. And unless the war with Iran comes to a conclusion soon, companies may be reluctant to increase hiring, given higher operational costs and uncertainty about the consequences of the conflict.
The only consolation is that we already lived through a similar turmoil around the same time last year. All’s well that ends well.
- Read other articles we’ve written on Singapore’s job landscape here.
Featured Image Credit: Shadow_of_light/ depositphotos
