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Just 7% of firms may cut headcount, from 50% in Q2

by Lin Yan Qin 05:55 AM Jun 09, 2009

THE news appears hopeful: Fewer Singapore employers are expecting to cut headcount in the next few months, and more are thinking of raising it.

But jobseekers should not celebrate yet - companies will remain wary of taking on new employees until there are concrete signs of a true economic recovery, say analysts.

Employers are "cautiously optimistic" about hiring in the third quarter, according to the latest quarterly survey by human resources consultancy Manpower Singapore.

The proportion expecting to lower headcount dropped sharply to 7 per cent from 50 per cent in the previous quarter; while those expecting to increase headcount climbed slightly to 12 per cent from 7 per cent.

The majority of the 697 employers surveyed indicated no change in headcount. Overall, the net employment outlook climbed to 5 per cent - from an abysmal minus-43 per cent in the second quarter.

Said Manpower Singapore country manager Philippe Capsie: "With the recent signs of stability in the global market, employers in industries such as transportation and utilities are expressing much more confidence compared to the previous quarter."

This sector, along with wholesale trade and retail trade, were the most positive about hiring, expecting a 7 per cent increase in headcount.

But chemicals firm Clariant (Singapore) country president Walter Mohr said the market optimism so far has yet to show up on order books. "I would be reluctant to say (our hiring outlook) is improving as we don't see demand picking up," he said.

Still, he felt the "most difficult period" had passed and the economy has stabilised. "Perhaps we will see a pick-up at the end of the year, though probably not in the next three months."

DBS economist Irvin Seah agreed that there has been improvement in the "fundamentals of the economy" which accounted for employers' optimism, but cautioned that there were still flaws waiting to be addressed.

"Until that happens, employers will be in no hurry to increase headcount," he said. "And when they do, it will happen very gradually ... it takes time to create new jobs."

Forecast Singapore economist Vishnu Varathan also pointed out that the current increase in demand was due more to companies restocking their inventory rather than real demand in consumption. "(The job market) will depend on whether the momentum continues, and we will see this when companies have stocked up and what level real demand is actually at," he said.

In the meantime, Mr Capsie warned that "despite improving employer confidence, employees and job seekers should still remain prepared for the second wave of retrenchment as the economy could continue to contract in the months ahead".

From TODAY, News – Tuesday, 09-Jun-2009

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