Global Talent Update - October 2016

GlobeEurope, Middle East and Africa

The U.K. saw strong employment figures in its most recent labour-reporting period, as Germany was recognized for being a potential new home for financial companies exiting the U.K. In parts of the Middle East, industrial jobs are on the rise.

As the world continues to watch the health of the U.K. economy in the wake of Brexit, news arrived that the historic move has yet to affect employment in the country, according to the Financial Times. Recent labour data revealed that the unemployment rate remained at 4.9 per cent in the three months ending in August, which was the lowest rate in 11 years.

The employment rate reached 74.5 per cent during this period, its highest level since 1971, when record-collecting began. Some 31.8 million people were employed during this three-month time frame, 106,000 more people than were working during the prior period, The Telegraph reported. Compared to the same period in 2015, there were 560,000 more people employed.

"[The] release is the latest piece of evidence which shows the economy has fared better than expected since June's referendum," said Ben Brettell, senior economist at Hargreaves Lansdown, according to the source.

Although overall wage growth decreased to 2.3 per cent, the source mentioned that the growth still exceeds inflation, which reached 1 per cent in September. According to Michael Martins, economist at the Institute of Directors, the service sector saw a 2.1 per cent wage growth during the previous three months, though he noted that the figure is less than half of what it was before the financial crisis in the country.

Although the U.K. employment figures were encouraging to many economic observers, some believe that Germany is in a strong position to absorb financial companies that are pushed out of, or choose to leave the U.K. due to Brexit, according to data analyzed by the Financial Times. The analysis found that "80 per cent of the EU's top 10 banks and 60 per cent of the top 10 insurers have head offices or regulated subsidiaries in Frankfurt, Munich or another German city." Luxembourg had the next-highest concentration of EU financial firm offices.

In the Middle East, the United Arab Emirates has seen growth in engineering and production jobs, according to TradeArabia, fueled by growth in sustainable energy as well as advancing technologies. The Monster Employment Index found that online recruitment in engineering and production in the UAE increased 2 per cent in August compared to the year prior. Furthermore, the report showed that the two industries were the only professional fields to expand in August.

However, many companies are planning to increase hiring efforts in the next several months, according to the Khaleej Times. The Middle East Job Index survey, compiled by YouGov and Bayt.com and published in late September, found that 67 per cent of companies in the UAE plan to hire new workers within the next three months.

Morocco may also see an employment boost, due to a new deal between the aviation industry in the country and Boeing. According to the CEO of Boeing Commercial Airplanes, Raymond Conner, the aviation giant plans to have suppliers set up operations in Morocco to create an "industrial ecosystem" in the country, the source reported. Conner said that the new partnership is anticipated to generate 8,700 jobs.

Asia-Pacific

Japan has seen job availability and graduate employment remain strong in recent months, while several industries in Thailand are undergoing shifts.

Job availability in Japan continued to hold at its highest level in 25 years in August, with the jobs-to-applicants ratio remaining for the third consecutive month at 1.37, The Japan Times reported. While the unemployment rose 0.1 per cent during the month, the reading the previous month was the lowest in more than two decades. Household spending fell in August, however, the income of salaried households increased 1.5 per cent during the month, to reach ¥480,083 ($71,196), the source reported.

News also came that 97.3 per cent of university graduates in Japan held jobs on April 1, the start of the fiscal year, surpassing the 96.9 per cent employment rate reached in 2008, the source reported. Over the year, the graduate employment rate was up 0.6 per cent.

Tokyo was named one of the top three cities in the Global Power City Index 2016 report compiled by the Institute for Urban Strategies at the Mori Memorial Foundation, according to Japan Today. The report ranks major cities across the globe for their attractiveness to creative professionals. Tokyo scored well in the Cultural Interaction, Accessibility and Livability categories. It is the first time that the city has received a top three ranking.

Much attention has been focused on the Bank of Japan recently, which is weighing a cut to interest rates, The Japan Times reported. The bank has held off on decreases, though Bank of Japan Gov. Haruhiko Kuroda stated that the bank "will not hesitate" to drop rates if the situation warrants it, according to the source. Currently the rate is at minus 0.1 per cent.

The bank has estimated that the national economy will expand by 1 per cent in 2016, increasing to 1.5 per cent in 2017.

Significant economic and employment changes may be in the forecast for Thailand, where the Ministry of Labour announced that it would be making changes to working conditions in the country, Thai Visa News reported. Department of Skill Development Director-General Theerapol Khunmuang described requiring skilled workers to take tests to ensure that their skills meet professional measures, as well as a rating system for workers based on the extensiveness of their skills and their professional knowledge.

Employment shifts may be happening in the aviation industry as well, Pattaya Mail reported. According to the transport minister, changes were issued that would raise the retirement age to 65 from 60 in order to help ease a shortage of workers in the industry.

The auto industry is also seeing a boost, as Ford increased production of its Ranger model at the recently opened Ford Thailand Manufacturing plant in Rayong, Carlist reported. Ford employs about 10,000 people in Thailand and has invested $2.7 billion into the national economy.

Americas

Despite a drop in job openings and a relatively unchanged unemployment rate of 5 per cent in September, the job market in the U.S. remains steady. Mexico can expect to see more jobs added over the next year and a new report shows expected growth for the Dominican economy.

Since August, the U.S. economy has shown a healthy growth rate with a solid flow of jobs added last month, according to The Wall Street Journal. There were 156,000 employees who joined the labour force in September, which brought the average rate of job growth for the past three months to 192,000. Though this rate is not as high as it was during the same time last year, it still marks the longest period of continuous increase. Last month, the U.S. labour market hit the six-year mark for continued growth.

"It's been a slow, steady grind, but nonetheless it's persisted," said Richard Moody, chief economist at Regions Financial Corp. "There's no reason why this shouldn't continue - over the next several quarters anyway."

Confidence in a stable economy was also supported by the growth in wages. CNN Money reported that in September wages increased by 2.6 per cent when compared to 2015. Although the jobless rate did increase by 0.1 per cent, up from 4.9 per cent in August, it signifies more people looking for work.

Also notable in recent economic news was that as of last month, U.S. employment numbers reached 15 million since hitting their all-time low in February 2010, noted CNN Money. According to economists, the job market has been the driving force behind the post-recession recovery.

In Mexico, although the economy may not be showing the strongest growth, consumers are still spending, thanks to the easy credit system, the "la quincena", reported the Financial Times. This fortnightly pay cycle enables people to make purchases with credit. This has helped pave the way for strong levels of consumption.
However, economists cautioned that credit cannot be a permanent solution for generating growth, noted the Financial Times.

Mexico may soon get a boost in terms of employment. According to a statement from the Mexican government, an investment from Cisco Systems Inc. has the potential to create up to 270 jobs in the country as well as 77 other positions outside of the plant, reported the Mexico News Network. The plans will unfold through 2018 and the company has announced spending of up to $4 billion.

Cisco is not the first U.S.-based company to pour resources into Mexico this year, noted the source, though it is one of the top five largest investments since December 2012.

New figures from the UN Economic Commission for Latin America and the Caribbean had positive reports as well as forecasts for several countries, including the Dominican Republic, according to Dominican Today. Though the Latin American and Caribbean region as a whole is expected to contract 0.9 per cent this year, Panama, Costa Rica and the Dominican Republic are among the nations that marked strong growth for 2016. The Dominican Republic is currently at the forefront, with a growth rate of 6.5 per cent over the year.