The first quarter of 2011 was widely hailed as one the strongest on record for new hires. As sentiment begins to wane, however, the continued vibrancy of the labour market may be in doubt.
A survey by Manpower found that fewer employers on average plan to hire new staff over the next quarter relative to the three months that ended on Thursday. According to the survey, this also held true after adjustments for seasonal variations.
Marginal declines in net employment outlook - the difference between the percentage of employers planning to hire and shed staff - were seen in four of the six industry sectors covered by the survey, with the other two remaining steady.
In terms of reduced hiring intent, the manufacturing and services sectors led the pack, with an overall drop of 4 per cent in net employment outlook. According to Manpower managing director Lancy Chui, this was largely due to the robust level of recent hiring in the sectors.
"When the economy first improved, services and manufacturing were the first to pick up," she says. "Also, services were among the most optimistic last quarter."
Despite the dip, Chui nevertheless prefers to look at the 14 per cent employment outlook figure as a positive sign. "This is still higher than last year," she says, adding that services too hold promise, particularly those catering to the still-strong financial, insurance and real-estate sectors.
Mining and construction didn't fare as well year-on-year, with a 12 per cent decline over 2010. Chui attributes this to the approval of large infrastructure projects, such as the Zhuhai-Macau bridge and the express rail link, which ate into a large part of the talent pool.
Seasonally adjusted hiring for transportation and utility firms, meanwhile, is also lower on past hiring, much of which took place last quarter. Actual employment, however, will mostly depend on business conditions, Chui explains. "The wholesale and retail industry, for example, despite rising net employment outlook, could be adversely affected by the continuing rise in retail rents," she says.
In terms of her long-term outlook, Chui contends that unemployment is likely to continue to fall over the coming year. "Confidence [to hire] among employers is these days very much affected by external factors, she says. "Right now it seems like the world has been moving from one crisis to another, causing many employers to take a wait-and-see-approach".