Bermuda’s labour market could be caught in the crossfire of a slowing global economy and intensifying trade tensions.

New data shows more than 80 million workers worldwide — many in roles linked to US consumer demand — are at risk from higher tariffs and trade uncertainty.

For economies such as Bermuda’s, which are tightly interwoven with US consumer and investment trends, the projected slowdown in employment growth and weakening labour demand could have major ripple effects.

The ILO’s World Economic and Social Outlook: May 2025 Update warns that the recent US imposition of sweeping “reciprocal tariffs” — including across major Asian economies — is contributing to a contraction in global trade flows and raising inflation expectations. The result: a projected slowdown in global GDP growth to 2.8 per cent, down from 3.2 per cent projected only six months earlier.

For Bermuda, whose economy is heavily service-oriented and closely linked to US financial and consumer sectors, these developments carry tangible risks.

According to the ILO, approximately 84 million workers across 71 countries hold jobs tied to final demand from US consumers. While most of these workers are in Asia and the Pacific, smaller economies that rely on trade and cross-border investment may face challenges due to their limited ability to absorb shocks or redirect investment flows.

The global employment outlook has been revised downward, with 2025 job growth expected to reach 1.5 per cent — equivalent to 53 million new jobs — compared with an earlier estimate of 1.7 per cent. The report attributes this seven million job gap in large part to the chilling effect of rising trade protectionism and supply chain fragmentation.

“The weakening of the global economy in 2025 has important implications for employment prospects worldwide,” the report stated.

It warned that many of the workers impacted by disrupted trade flows may shift into lower-quality, more informal jobs as employment structures adjusted.

Despite the negative job news globally, the 2024 Employment Survey reported an increase of 471 jobs in Bermuda, bringing total employment to 33,337 — a 1.4 per cent rise and the third consecutive year of growth, primarily driven by the international business and the accommodation and food-service sectors.

The island's unemployment rate reached an historic low of 2.5 per cent in May 2023 — the lowest since 1980, according to the Department of Statistics.

However, although unemployment remains low in high-income countries, some are showing signs of labour market fragility.

Job vacancies have dropped below long-term trends and consumer and business sentiment is declining, the report said.

The ILO cautions that, while inflation is easing, ongoing volatility in capital flows, elevated public debt and new trade barriers are complicating the policy environment.