Singapore Labour Market Q1 2026: What the Numbers Mean for Construction Employers

Gabriel Rodrigues
May 13
3 min read

Updated: 2 days ago

Singapore's economy expanded 4.6% year-on-year in Q1 2026, and the labour market recorded its 18th consecutive quarter of growth. On the surface, that sounds positive. But the latest MOM Labour Market Advance Release tells a more nuanced story — one that construction employers hiring foreign workers need to pay close attention to.

Here's what the data says, and what it means for your hiring plans.

The Headline Numbers

Total employment growth: 5,000 in Q1 2026 — up from 2,300 in Q1 2025, but down from 17,700 in Q4 2025
Unemployment: 2.1% overall, 2.9% for residents, 3.1% for citizens (March 2026)
Retrenchments: 3,700 — stable at 1.5 per 1,000 employees, similar to the previous quarter
Job vacancies: 77,700 (December 2025), with a vacancy-to-unemployed ratio of 1.58

The moderation in growth is partly seasonal — construction activity typically slows during the Chinese New Year period. MOM notes this reflects seasonal effects and a step-down from a high base, not a broad weakening of the labour market.

What It Means for the Construction Sector

Construction continued to be the primary driver of non-resident employment growth in Q1 2026, even as the pace eased from the previous quarter. This reflects what most construction employers already experience on the ground: demand for foreign workers in construction remains strong, but supply and process constraints make hiring a challenge.

The sector now employs 569,100 workers — up from 536,500 in March 2025. That's a year-on-year increase of approximately 32,600 workers, driven almost entirely by non-resident (Work Permit) hiring.

For employers, this means competition for workers — and for good agency relationships — is real. Sourcing takes longer, and late starters lose out.

Why Employers Are Getting Cautious

MOM's data shows a notable shift in employer sentiment heading into Q2 2026:

The share of firms expecting to hire in the next 3 months dropped from 54.6% to 44.6% between February and March 2026
Expectations to raise wages fell from 39.3% to 25.4% over the same period
Businesses cited geopolitical tensions and global economic uncertainty as the key driver of caution

MOM notes early signs of stabilisation in April, but expectations remain below pre-crisis levels in February. The message: hiring hasn't stopped, but employers are being more deliberate. If you're planning construction hires for Q2 or Q3 2026, the time to initiate is now — not when your project needs to start.

What Construction Employers Should Do Now

1. Start your hiring process early

Work Permit applications for construction workers currently take 2–4 months end-to-end from sourcing to arrival. If you need workers on site by Q3 2026, you should be submitting paperwork now.

Good news ahead: From 2027, MOM is shortening the construction WP approval process from 4 months to 1 month. That change will significantly improve planning timelines for future projects — but it's still ahead. For now, early starts matter. Read our full breakdown: Singapore Construction Work Permit: Hiring Process Shortened from 4 Months to 1 Month from 2027

2. Check your Work Permit quota

With 569,100 workers in construction and rising, the sector's Dependency Ratio Ceiling (DRC) matters. Check your company's remaining WP quota before committing to new project headcount. Running into a quota ceiling mid-project is a costly problem.

3. Work with a MOM-licensed employment agency

In a cautious market, compliance issues or delayed WP applications are the last thing you need. A licensed EA handles sourcing, screening, WP applications, IPA issuance, and pre-arrival logistics — so your project timelines stay on track.

For guidance on what to look for in an agency, read: How to Choose a Singapore Employment Agency for Construction Workers

How Stagencies Can Help

Stagencies Pte. Ltd. is a MOM-licensed employment agency specialising in Work Permit placements for Singapore's construction sector. We manage the full process — from candidate sourcing and screening to WP application, IPA issuance, security bond, and worker arrival.

📧 hr@stagencies.com.sg | 📱 WhatsApp us directly

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