US hiring outlook positive, elsewhere not so much

July 30, 2016

By CNBCGlobalPost Writer

A “we are hiring” sign is displayed on a table during the San Francisco Hirevent job fair at the Hotel Whitcomb on March 27, 2012 in San Francisco.
Justin Sullivan

More employers in the United States plan to hire workers next quarter than in any period since the fourth quarter of 2008, according to a survey by Manpower Group, the global employment services giant.

Manpower's quarterly survey released Tuesday found most employers around the globe were uncertain about hiring more workers in the July through September period given tepid consumer demand. There were certain bright spots, however, with employers in the US and some parts of Europe feeling cautiously optimistic.

"If you look at it from a global perspective, the overall feeling is that there are definitely challenges," said Manpower's CEO Jeff Joerres. But he said employers are more optimistic than in past months about global economic prospects.

Manpower, which surveyed 42 economies, found that employers in 31 countries and territories planned to hire next quarter. Hiring intentions strengthened in 17 economies, including Spain, Greece, and the US, compared to the previous quarter.

Hiring intentions remained unchanged in four economies and weakened in 21, including France, China, and India.

The US added 175,000 jobs last month after adding only 149,000 in April, the Labor Department said on Friday. The unemployment rate rose a tenth of a point to 7.6 percent.

America's net employment outlook ticked forward one point from the previous quarter to a seasonally adjusted plus-12, the report said. The outlook measures the difference between those adding jobs and those cutting jobs. Manpower's index is a directional indicator rather than a predictor of the size of job gains.

For the second consecutive quarter, employers in all 50 states, Washington, D.C., and Puerto Rico have reported positive hiring plans, Manpower said.

Joerres said US companies still have concerns about what will happen next in areas like Europe or China, about health-care costs and general uncertainty.

"In the past, that would shock the system," he said. "Today, we're used to shocks."

More than one in four employers in the US construction sector have said they will hire in the quarter beginning in July, the strongest outlook since before the global recession. This is a positive sign for the housing market, Joerres said.

In Europe, hiring has stalled with growing uncertainties among employers, the report said. But Joerres said the region has had some positive indicators, including in Greece, which has seen its still-negative hiring outlook improve for four consecutive quarters.

"We're not saying Europe is out of the woods," Joerres said. "It's that Europe is still moving and driving towards an overall solution rather than falling off the cliff, and that's positive for the rest of the world."

'Less Emerging and More Mature'

Hiring outlooks weakened in most of the Asia Pacific region, most significantly in India, which reported the weakest expectations since joining Manpower's survey eight years ago.

While none of the Indian employers surveyed by Manpower said they intended to reduce their workforce this quarter, the hiring expectations dropped 6 points from the previous quarter and 28 points from a year earlier to a plus-18. Joerres said the decline is partly due to the slowdown of India's business process outsourcing industry, which has matured.

"The Indias and Chinas of the world are in some ways less emerging and more mature, and are feeling some of the illnesses of a mature economy," Joerres said.

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Sixty-one percent of Indian employers have also struggled to find suitable employees, telling Manpower that recent graduates of India's business and engineering schools often lack necessary hard and soft skills.

The talent shortage has been an issue worldwide, with a lack of skilled trades workers topping the list. Thirty-five percent of employers reported difficulties in filling positions due to a talent shortage, the highest proportion since 2007.

Employers in the United States and Germany, however, reported a smaller talent shortage this year than last year, with the lowest percentages reported in both countries since 2010.

Thirty-nine percent of US employers reported difficulties in filling positions, 10 percentage points less than last year, and 35 percent of German employers, 7 percentage points less.