Government Accepts the National Wages Council Guidelines for 2026/2027
The Government accepts the National Wages Council (NWC) 2026/2027 Guidelines.
2 The labour market continued to expand in the first half of 2026, with stronger-than-expected overall performance of the Singapore economy, although growth was uneven across sectors and segments. Unemployment rates remained low and stable and real incomes grew. Retrenchments rose in the second quarter of 2026 and was mostly concentrated in outward-oriented sectors with the majority of retrenchments due to business reorganisation or restructuring.
3 Overall labour productivity, as measured by real value-added per actual hour worked, rose by 3.8% y-o-y in the first half of 2026, while overall unit labour cost (ULC) fell by 0.8% y-o-y as productivity growth outpaced the increase in labour costs per worker. However, productivity growth was uneven across sectors. Strong productivity growth in outward-oriented sectors such as the manufacturing and wholesale trade sectors led to declines in their ULCs, while weaker productivity growth in sectors such as the food & beverage services and transportation & storage sectors had increases in their ULCs.
4 Based on advance estimates, the Singapore economy grew by 6.0% y-o-y in the first three quarters of 2026. Growth was led by the segments and sectors that benefited from robust global Artificial Intelligence (AI)-related demand, such as the electronics and precision engineering clusters of the manufacturing sector. In contrast, growth was slower in the consumer-facing sectors, with the food & beverage services sector experiencing a contraction. The Ministry of Energy, Trade and Industry (METI) has projected that the Singapore economy will grow by 4.5% to 5.5% for the whole of 2026. Looking ahead to 2027, downside risks remain, including a potential escalation of the Middle East conflict that could drive up energy prices and inflation further, additional US tariff actions, and a sudden shift in sentiments regarding global AI-related capital spending1.
5 The tripartite partners call upon employers to take a positive-leaning posture on providing appropriate wage increases and variable payments in recognition of employees’ contributions, while calibrating wage increases to their business performance and prospects. The Government also recognises that uneven business conditions and continued uncertainty in the economic outlook ahead warrant flexibility in wage adjustments.
6 As part of our social compact, we must press on with the national effort to uplift lower-wage workers so that all workers enjoy the fruits of Singapore’s growth. Today, up to nine in 10 full-time lower-wage workers benefit from the Progressive Wage Model, Local Qualifying Salary and/or Progressive Wage Mark accreditation scheme.
7 The NWC’s recommendations for lower-wage workers provide meaningful wage uplift for lower-wage workers, while allowing for flexibility for employers based on economic and business conditions. To support employers in uplifting lower-wage workers, the Government recently extended the Progressive Wage Credit Scheme until end 2028. Employers who give eligible lower-wage workers wage increases can receive transitional support, enabling them to invest in workforce and enterprise transformation so that wage increases are sustainable. The Government will work with the labour movement, SNEF as well as Trade Associations and Chambers to raise awareness of and encourage employers to adopt the NWC’s wage guidelines for lower-wage workers.
8 To ensure that wage growth is sustainable and continues to be supported by productivity growth, the Government calls upon employers to press on with efforts to transform their businesses and workforce, and employees to continue reskilling and upskilling. Employers should redesign jobs and invest in their employees so that they can thrive in an AI-enabled economy.
9 The Government will continue to work with tripartite partners to champion fair, inclusive and sustainable wage growth for our workers, as recommended by the NWC, while ensuring that our businesses stay productive and competitive.