Singapore’s economy is growing strongly. According to the Ministry of Trade & Industry (MTI), Singapore’s GDP grew by 5.9% year on year for 2Q2026, with growth for 1H2026 at 6.1%. This was strong enough for the MTI to raise its full-year 2026 growth forecast to between 4.5% and 5.5%.
On the surface, these numbers look very good. But would every worker feel the same way? Probably not.
During this period, retrenchments have been rising while jobseekers are, on average, taking longer to find suitable work. Even workers who are currently employed are wondering whether AI and automation could eventually affect their jobs.
This creates an interesting question. How can the economy be growing at close to 6%, while some workers are feeling less secure?
Part of the answer is that the type of economic growth Singapore is experiencing today may be different from what we were used to in the past.
Singapore Can Produce More Without Hiring As Many More Workers
Manufacturing has been one of the strongest contributors to recent growth. For 2Q206, manufacturing grew 12.5% year on year. Electronics and precision engineering drove much of this, supported by strong AI-related demand for semiconductors and semiconductor manufacturing equipment.
This is good for Singapore. Being part of the global AI supply chain means more exports, investment and high-value economic activity. The catch, though, is that producing more does not necessarily require companies to hire proportionately more workers.
Take a semiconductor plant, for example. A company can spend billions on new equipment, increase output substantially and contribute more to Singapore’s GDP. Yet much of that additional production could come from better machinery and higher productivity rather than a similarly large increase in workforce.
While GDP is growing, the average worker may not necessarily see that growth through more job openings. So while productivity is increasing, employment may not be.
Retrenchments Can Rise Even When Unemployment Stays Low
We already see some signs of this tension in Singapore’s labour market. There were 4,500 retrenchments in 2Q2026, up from 3,830 in the previous quarter. This was the fourth consecutive quarterly increase.
Yet, as we previously highlighted in our article on why retrenchments are rising even while unemployment remains low, total employment still increased by 10,700 during the quarter, while resident unemployment remained at 2.9%.
So Singapore is not currently experiencing a situation where jobs are disappearing across the entire economy. Instead, some companies are expanding while others are restructuring.
For the individual worker affected, the outcome is still the same. They may lose their job even as the wider economy grows.
Having Jobs Available Does Not Mean Every Worker Can Move Into Them
There is another reason why headline employment numbers may feel different from individual experiences. The jobs being created today are not always the same as the jobs that are disappearing, and AI is accelerating this disruption.
In the past, technological change often happened gradually enough for workers and companies to adjust over time. AI is moving much faster. Companies can now automate parts of administrative, analytical, customer service and even professional work without waiting for an entirely new generation of technology.
This is exactly what Deputy Prime Minister Gan Kim Yong highlighted in his speech at the Economic Society of Singapore’s 70th Anniversary Dinner:
“We cannot assume that the same rate of growth will generate the same number of jobs as before.”
He added that AI and automation will allow firms to produce more with the same or fewer workers, even as new roles emerge and some existing ones change, shrink or disappear.
This means job disruption can happen even when a company is growing. For example, a business may still be expanding revenue and investing in Singapore. Still, it may need fewer people for certain functions because existing employees can use AI tools to do more. At the same time, it may be hiring for very different roles, such as AI engineers, data specialists, cybersecurity professionals or workers who know how to apply AI within a specific industry.
The issue is not simply whether AI will “take jobs”. It is whether workers whose roles are changing or being displaced can move into the new opportunities being created, and whether they can do so quickly enough.
Economic Growth Still Matters. We Need To Look Beyond GDP
As Singapore becomes more productive and more technology-driven, economic growth may feel different from what we were used to in the past.
This does not mean Singapore should stop pursuing economic growth. Growth remains important because it supports businesses, attracts investment, generates tax revenue and gives workers more opportunities than they would have in a stagnant economy.
However, we need to recognise that GDP increasingly tells us only part of the story. We also need to look at whether resident employment is growing, whether wages are keeping pace with productivity and inflation, and how quickly displaced workers can find suitable new jobs.
Photo Credit: iStock/3yephotography
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