Wage growth set to remain positive in 2026: MOM

Amid global economic unpredictability and continuing geopolitical shocks, wage growth is set to remain positive in 2026, said the Ministry of Manpower (MOM) on Thursday (May 28).

Still, firms are likely to be cautious in wage-setting, according to the report on Wage Practices 2025 released by MOM on Thursday.

Nominal wages rose 4.9 per cent last year, slower than the 5.6 per cent recorded in 2024. Nominal wage refers to total wage, including components such as the basic wage and annual variable component.

Meanwhile, real wages grew by 4 per cent in 2025 compared with 3.2 per cent in 2024, after accounting for inflation, indicating improved purchasing power for workers.

At the same time, 64.1 per cent of firms reported stable or improved profitability in 2025, up from 62.7 per cent in 2024, suggesting a growing share of financially stable firms.

This positive outlook resulted in wage growth observed across all employee groups and industries.

Administrative and support services recorded the highest wage growth at 7.5 per cent, though this was lower than the 8.7 per cent growth recorded in 2024.

Certain industries such as accommodation recorded the largest moderation in wage growth, easing from 5.5 per cent in 2024 to 3.9 per cent last year as labour demand stabilised following the hiring surge during the post-pandemic recovery period from 2022 and 2023.

Looking ahead, wage growth is expected to stay positive but moderate amid a more uncertain global environment and lingering inflation risks. 

"Over the longer term, sustaining real wage growth will continue to depend on the economic outlook, productivity improvements, workforce upgrading, and wage-setting practices," said MOM.

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helmy.saat@asiaone.com