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2008-06-24 | All chapters

New Labour Contract Law and Olympic Preparations Powering Stronger Net Employment Outlook for the Upcoming Quarter
Manpower China Media Release

Services, Transportation & Utilities and Finance, Insurance & Real Estate Industry Sectors Should Rebound According to Employer Forecasts

Manpower, a global employment services provider, released the latest Manpower Employment Outlook Survey for Greater China recently. Three months after reporting the weakest Net Employment Outlook in three years, Chinese employers are predicting moderately improved hiring opportunities for job seekers in the forthcoming quarter. The Quarter 3 2008 Net Employment Outlook for China stands at +15% (seasonally adjusted), representing a 7 percentage point improvement compared to last quarter, but a 7 percentage point decline compared to the same quarter last year.

According to Lucille Wu, Managing Director of Manpower Greater China, several factors may be behind the rising optimism of Chinese employers. “As the China Labor Contract Law has been in place for more than half a year, the impact of the law is now becoming clearer for employers throughout China. With deeper understanding of the law, employers are gradually beginning to adjust their human resource strategies. Moreover, they are also realizing benefits from the new law, such as more flexible workforce utilization and more harmonious employment relationships. Huge transportation demand from the upcoming Olympic Games, the newly operated airport terminals in Shanghai, Beijing and Wuhan, and growth among air carriers is driving the hiring demand in the Transportation & Utilities Sector.”

The Net Employment Outlook is derived by taking the percentage of employers anticipating an increase in hiring activity less the percentage of employers who expect to reduce their workforces.

Taking into account seasonal variations, the most optimistic hiring expectations are reported by employers in three industry sectors: Finance, Insurance & Real Estate; Services; and Transportation & Utilities, with the Net Employment Outlook in each sector at +18%. Notably, employers in the Transportation & Utilities sector report the most improved hiring intentions among any sectors for the upcoming quarter with a considerable increase of 14 percentage points quarter-over-quarter.

This quarter, employers in Shenzhen participated in the Manpower Employment Outlook Survey for the first time. The Net Employment Outlook stands at +8%, which is the second weakest Net Employment Outlook of the forthcoming quarter. Many manufacturing companies are relocating their production plants to central and western China and Southeast Asia and have been doing so since the beginning of 2008. This relocation activity has impacted the city’s demand for workers. Shenzhen is now dedicated to building itself as an international financial and business center. Shenzhen will concentrate on promoting high value-added industries like technology, culture, finance and logistics which will increase the demand for workers in these industries.

For the second consecutive quarter, employers in Wuhan report the strongest hiring intentions among all eight surveyed regions. Ms Wu comments that the strong hiring pace anticipated by the region’s employers is the result of relocations of east coast industries to the central and western region in recent years. “Wuhan’s abundant resources, competitive production costs and favorable policies offered by the local government are now attracting more and more multinational corporations. Domestic companies are also transferring their manufacturing plants to Wuhan. We anticipate that with the rising of the central and western China, the region will enjoy growing demand for more and higher-level talents.”

Thanks to the strong Services and Transportation & Utilities industry sector performances associated with the Olympic Games, employers in Beijing reported the second most optimistic hiring intention this quarter, with a Net Employment Outlook of +18%.

Elsewhere in the world, third-quarter hiring is expected to be less positive compared to the previous quarter. Almost all 32 countries anticipated weaker employment outlook compared to the same quarter in 2007.

In Asia Pacific region, employer hiring expectations are strongest in India and Singapore, while employers in China and New Zealand are reporting the region’s least optimistic hiring plans. Regionally, job prospects in both the Transportation and Utilities and the Wholesale & Retail Trade industry sectors have declined in seven of eight countries compared to Quarter 3 2007. Bullish employer forecasts in the Services and Finance, Insurance & Real Estate industry sectors are driving much of the strength in the Outlook for India.

Employers across the seven countries surveyed in the Americas are reporting varying degrees of positive hiring activity. Employers in Peru, Costa Rica and Argentina are the most optimistic about hiring in the next three months. Notably, and despite relatively strong hiring expectations, Argentinean employers are reporting their least optimistic Outlook since the survey began in Quarter 1 2007.

In the EMEA region, employers are also reporting varying degrees of positive hiring activity. Compared to Quarter 3 2007, Net Employment Outlooks in the region have decreased in 13 countries.

The next Manpower Employment Outlook Survey will be released on the 9th of September 2008 to report hiring expectations for the fourth quarter of 2008.