ILO revises projected employment growth in Asia Pacific downwards to 1.7% in 2025

Prior to the recent trade uncertainty, employment in Asia and the Pacific was set to grow by 1.9% (38mn) in 2025.

The APAC region remains the fastest-growing region; however, given the exposure of the region’s economy to the recent trade uncertainty, economic growth for 2025 has been revised downwards. 

According to the International Labour Organization’s (ILO) World Employment and Social Outlook 2025: Asia and the Pacific May Update, global employment growth has been revised downward by 7mn jobs — from 60mn to 53mn. This downgrade is largely attributed to slower growth in the Asia Pacific region, which accounts for more than half (4mn) of the reduced forecast.

Based on the International Monetary Fund (IMF)'s World Economic Outlook, published in October 2024, the ILO initially projected employment in the Asia Pacific region to grow at 1.9% in 2025 — the fastest rate among all ILO regions. On the other hand, following the IMF’s downward revision of the region’s GDP forecast for 2025, the ILO has adjusted its employment growth estimate to 1.7%.

While this still marks the highest growth rate globally, it represents a significant drop in the projected number of jobs. Employment in the region was originally expected to increase by 38mn in 2025, but that figure has now been revised down to 34mn due to rising economic uncertainty.

APAC's trade-exposed jobs under pressure 

In the Asia Pacific region, 2.9% of total employment, equivalent to more than 55mn jobs, is directly or indirectly linked to final demand in the US, according to the ILO, making the region particularly vulnerable to shifts in global trade, especially as economic conditions soften.

Manufacturing is the most exposed sector, accounting for just over 27mn of these jobs — around 9% of total manufacturing employment in the region. Non-manufacturing sectors make up more than 28mn jobs linked to U.S. final demand, though these represent under 2% of employment in those sectors.

All subregions are affected to varying degrees:

• East Asia has the highest volume of trade-linked jobs, with nearly 15mn in manufacturing — primarily in electrical and optical equipment — and close to 11mn in non-manufacturing.
• South-East Asia is the most reliant proportionally, with almost 14% of its manufacturing jobs tied to US demand, especially in textiles and textile products.
• South Asia and the Pacific are less exposed, with 6.9% and 5.4% of their manufacturing jobs linked to US demand respectively. In both subregions, textiles are the most affected subsector, although these jobs account for less than 1% of total employment.

Slow employment growth may hinder employment efforts in APAC

While employment in Asia and the Pacific is projected to grow by 34mn in 2025, the region continues to grapple with persistently high levels of informal employment. Approximately 1.3bn workers— around 66% of the total workforce— are engaged in informal jobs. Additionally, over 80% of enterprises in the region operate informally.

The prevalence of informality varies across subregions:

• South Asia has the highest rate, with nearly 87% of workers in informal employment.
• East Asia shows significantly lower levels— around 27%, excluding China.
• Pacific Islands also report relatively low rates at around 35%, though progress has been slow.

Over the past two decades, the region has made strides in promoting formal employment. However, gains have stalled since the onset of COVID-19. With employment growth now slowing amid economic uncertainty, efforts to reduce informality face renewed challenges.

Next steps

To support formal job creation and safeguard workers and enterprises amid growing uncertainty, a range of policy measures should be considered—particularly where fiscal space allows.

One key area is social protection. Well-designed and adequately funded systems can cushion the impact of job transitions by providing essential income support. When made shock-resilient, these systems can also protect the most vulnerable from the disruptions brought by technological change, climate risks, and shifting macroeconomic conditions.

In parallel, active labour market policies should be reinforced. These include improving job matching services and expanding access to training and reskilling opportunities to help workers transition across occupations and sectors as economic conditions evolve.

Enterprises, too, need targeted support — especially small and medium-sized ones — to access new markets (such as through intra-regional trade), formalise operations, and adapt to ongoing structural changes.

Steven Tobin, Labour Economist at the ILO Regional Office for Asia and the Pacific commented: "While the 1.7% annual employment growth for the region remains the highest worldwide, it still represents a steep decline in the estimated number of jobs expected for the region in 2025.

"As workers and enterprises face heightened risks of disruption, efforts to improve worker and enterprise resilience by expanding and diversifying markets, improving social protection schemes and bolstering active labour market policies such as reskilling opportunities in in-demand occupations, among others, will be needed."

READ MORE: Building a fairer future: ILO pushes for integrated approach to jobs, labour rights, and growth

Infographics / World Employment and Social Outlook 2025: Asia and the Pacific May Update