Singapore’s economy continues to defy global headwinds, with manufacturing output soaring by 7.1% in July 2025 and employment showing steady growth in the second quarter of the year. These figures, released by the Economic Development Board (EDB) and the Ministry of Manpower (MOM) respectively, paint a picture of resilience amid looming uncertainties, including potential disruptions from US trade policies under President Donald Trump. As the city-state navigates a complex global landscape, its industrial strength and labor market stability offer a buffer against external shocks, though challenges remain for outward-oriented sectors.
Manufacturing Boom Exceeds Expectations
The manufacturing sector, a cornerstone of Singapore’s export-driven economy, recorded a robust 7.1% year-on-year increase in output for July 2025, matching June’s revised growth rate. This performance far surpassed the median forecast of 0.9% from a Bloomberg survey of private-sector economists, signaling stronger-than-expected industrial momentum. On a seasonally adjusted monthly basis, output expanded by 8.2%, a sharp turnaround from June’s 0.8% contraction. Excluding the volatile biomedical manufacturing cluster, the growth was even more pronounced at 9.4% year-on-year and 7.1% month-on-month, underscoring broad-based strength across industries.
The electronics cluster, often seen as a bellwether for global tech demand, led the charge with a 13.1% surge in output, up from 8.4% in June. Within this sector, the infocomms and consumer electronics segment skyrocketed by 86.8%, driven by heightened production of server-related products. Other sub-segments, including semiconductors and electronic modules, also posted gains, though computer peripherals and data storage saw a 4.2% decline. This disparity highlights the uneven recovery in tech markets, with enterprise-focused products outpacing consumer-facing ones amid shifting global priorities. 
Transport engineering emerged as another standout, with output climbing 15.8% year-on-year, building on June’s 13.1% growth. The aerospace segment, a key driver, expanded by 22.7%, fueled by increased production of aircraft parts and sustained demand for maintenance, repair, and overhaul services from commercial airlines. The marine and offshore engineering segment also grew by 11.7%, reflecting bustling activity in shipyards, though the land segment lagged with a 23.2% drop. These figures illustrate Singapore’s strategic positioning in high-value manufacturing niches, particularly those tied to global travel and trade recovery.
Other clusters contributed to the overall uptick, with precision engineering and chemicals recording growth of 9.6% and 4.2%, respectively. Biomedical engineering eked out a modest 0.2% rise, while general manufacturing was the sole laggard, contracting by 9.7% year-on-year, though this was an improvement from June’s 11.7% decline. All sub-segments within general manufacturing, including food, beverages, and tobacco, saw output fall, pointing to persistent softness in domestic consumption-driven industries.
Employment Growth
Parallel to the manufacturing surge, Singapore’s labor market demonstrated resilience in the second quarter of 2025. Total employment rose by 8,400, a notable increase from the 2,300 recorded in the first quarter, though still below the 11,300 seen in the same period of 2024. According to preliminary data from the Ministry of Manpower, resident employment grew in sectors such as financial services and health and social services, reflecting sustained demand for skilled labor in these areas. However, declines were observed in outward-oriented sectors like professional services and information and communications, as well as in retail trade, where employers continued to shed workers following seasonal hiring spikes at the end of 2024.
Non-resident employment also expanded, driven largely by work permit holders in the construction sector. Additional gains were reported in administrative and support services, as well as health and social services, underscoring the critical role of foreign labor in supporting Singapore’s infrastructure and care economy. Despite these positive trends, the unemployment rate edged up slightly to 2.1% in June 2025, from 1.9% in May and 2.0% in April. The Ministry of Manpower noted that while short-term fluctuations persist, unemployment remains within a non-recessionary range, signaling underlying stability.
Retrenchments held steady at 3,500 in the second quarter, a marginal decrease from 3,590 in the prior quarter. The incidence of retrenchment also dipped to 1.4 per 1,000 employees, down from 1.5, with business reorganization and restructuring cited as the primary reasons for layoffs. Across most sectors, retrenchment levels were either stable or lower, a reassuring sign amid fears of global economic turbulence. The Ministry of Manpower emphasized the need for employers and workers to leverage government initiatives for transformation and upskilling to adapt to changing conditions and seize emerging opportunities.
Navigating Global Headwinds
Singapore’s economic performance in 2025 comes against a backdrop of heightened global uncertainty. The re-election of US President Donald Trump has raised concerns over potential tariffs and trade disruptions, which could reverberate through export-dependent economies like Singapore. Outward-oriented sectors, already showing signs of strain with employment declines in professional services and information and communications, may face further pressure on hiring and wage growth. The Ministry of Manpower has flagged these risks, urging proactive measures to mitigate impacts through workforce development and business adaptation.
Yet, the city-state’s latest data suggests a capacity to weather such storms. The manufacturing sector’s robust growth, particularly in electronics and transport engineering, reflects Singapore’s entrenched position in global supply chains for high-tech and high-value goods. These industries benefit from long-term trends such as digital transformation and the recovery of air travel, which are likely to sustain demand even if trade tensions escalate. Moreover, the stability in employment and retrenchment figures indicates a labor market that, while not immune to external shocks, is underpinned by structural strengths in key sectors like finance and healthcare.
Challenges and Opportunities Ahead
Despite the positive indicators, vulnerabilities persist. The general manufacturing sector’s continued decline points to weaknesses in domestic-oriented industries, which may struggle to regain footing without a broader revival in consumer spending. Similarly, the slight uptick in unemployment, though within a manageable range, warrants monitoring, especially if global conditions deteriorate further. For policymakers, the challenge lies in balancing support for struggling sectors with investments in future-ready industries like technology and precision engineering, where Singapore holds a competitive edge.
On the employment front, the reliance on non-resident labor, particularly in construction, raises questions about long-term workforce sustainability. While foreign workers fill critical gaps, enhancing resident employability through upskilling programs remains a priority to ensure inclusive growth. The Ministry of Manpower’s call for transformation echoes broader national strategies to pivot toward innovation and resilience, themes that have defined Singapore’s economic playbook for decades.
As Singapore charts its course through 2025, the interplay between industrial strength and labor market dynamics will be crucial. The manufacturing sector’s unexpected vigor offers a lifeline amid global uncertainties, while employment stability provides a foundation for social and economic cohesion. However, with potential trade disruptions on the horizon, the city-state must remain agile, leveraging its reputation for adaptability and forward-thinking policy.
For now, the numbers tell a story of endurance. Whether this momentum can be sustained in the face of looming challenges remains an open question, one that policymakers, businesses, and workers alike will need to address in the months ahead.
