“Nominal wage levels have risen further in 2023, albeit at a slower y-o-y rate. Even if nominal wage growth is likely to moderate further due to the uncertain economic environment and cautious business hiring, as we expect, businesses would still feel the pinch of the cost pressures,” says Chua.
Singapore’s businesses continue to face cost challenges amid slower economic growth with wages remaining a top business cost challenge, says DBS Group Research economist Chua Han Teng.
On the back of a tight labour market spurred by the post-pandemic recovery and competition for talent, nominal wage growth has been elevated, adds Chua. He estimates that nominal measures have pushed about 3% above the level implied by its pre-pandemic trend by 4Q2022 after a strong recovery from 2021.
