Next year employees in Singapore can expect to receive salary increase of 2.9 percent above inflation on an average, according to the latest Salary Trends survey by ECA International, the world’s leading provider of knowledge, information and software for the management and assignment of employees around the world.
Despite offering 4 percent nominal salary increase in both 2016 and 2017, rising inflation has meant that staff in Singapore will see a decline in real wage increases next year. With Singapore transitioning from 0.3 percent deflation in 2016 to 1.1 percent inflation in 2017, real wage increases for employees will take a hit.
The generous 4.3 percent average real wage increases enjoyed in 2016 will not be seen in 2017. Instead, real wage increases are forecast at 2.9 percent.
“The open, trade-dominated economy of Singapore is withstanding the deceleration of growth in China reasonably well, but is nevertheless experiencing a slowdown itself”, said Lee Quane, Regional Director – Asia, ECA International.
“China’s downturn is reducing demand and trade throughout the region and this is having an impact on locations such as Singapore, with rising inflation forecasted next year. However, Singapore continues to sit above the average wage increases seen in the Asia Pacific region, forecast to be 2.6 percent for 2017.”
Employees based in Malaysia should see a similar pattern emerge. They forecast real wage increases of 2 percent in 2017, down on the 3.1 percent experienced by staff in Malaysia in 2016 due to rising inflation.
“Low unemployment continues to exert upward pressure on wages in Malaysia and this is reflected in the 5 percent nominal salary increases forecasted next year. However, labour costs here are higher than some of Malaysia’s competitors, resulting in investment being lost, especially to other ASEAN member economies. As is the case with Singapore, the regional economic slowdown is contributing to rising inflation, which is why employees based here will be worse off next year than in 2016”, said Quane.
ECA’s Salary Trends Reports analyse current and projected salary increases for local employees. They provide information on real pay rises by factoring in inflation rates. This year, they are based on information collected from 260 multinational companies across 72 countries.
Mainland China and Special Administrative Regions
In mainland China, companies are planning to award 7 percent salary increases next year. After inflation is factored in, staff here will see the fourth highest wage increases globally in 2017. They can expect to see increases of 4.7 percent in real terms. Despite its continued economic slowdown, which is expected to continue in 2017, China’s economy remains the second largest in the world.
Hong Kongers will see their salaries increase by an average of 4 percent again in 2017. After factoring in inflation, predicted to be 2.6 percent in 2017, employees will experience the third lowest wage increase in Asia Pacific, estimated to be 1.4 percent wage increase in real terms.
Employees based in Macau can expect real wage increases of 1.7 percent in 2017, thus surpassing Hong Kong in the regional rankings. These forecast wage increases are up on the 1.5 percent experienced by staff in Macau in 2016.
Trends in Asia Pacific
On average, real wage increases in Asia Pacific are expected to be 2.6 percent in 2017, higher than all other regions surveyed. In terms of real salary increases, it is staff in Vietnam that will experience the highest regional and second highest global real wage increase in 2017 at 5.4 percent.
Staff based in Myanmar can expect 1.6 percent worse off in 2017. Despite nominal salary increases of 7.5 percent being forecasted, the inflation will stand at 9.1 percent. They are the only location in the Asia Pacific region that will see staff worse off in 2017.
After another period of deflation in Japan, the IMF is predicting marginal inflation throughout 2017. The continued oscillation between inflation and deflation suggests that the government’s efforts to raise wages in recent years, to encourage spending, may not be sustainable and Japan should continue to see small salary increases in the foreseeable future.
In terms of real wage increases, staff in Japan can expect 1.9 percent uplifts in 2017, the sixth lowest in the Asia Pacific region. Organisations based in India are offering the second highest real wage increases in the Asia Pacific region in 2017. On an average, rising nominal salary increases combined with falling inflation in 2017 means that staff can expect 4.8 percent wage increases in real terms.
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