Global Talent Update - October 2019

GlobeEurope, Middle East and Africa

In Germany, there’s a “thirst for workers,” according to recent reporting by the Financial Times, which suggests an interesting “paradox” given its current economic situation.

For example, the article details how the country’s economy has effectively gone “into reverse,” which means that global trade tensions are slowing down the region’s financial situation dramatically. “The country’s economy has gone into reverse, weighed down by global trade tensions, Brexit uncertainty and disruption to the car industry. It shrank by 0.1 per cent in the second quarter and is widely expected to suffer a further decline in the third quarter, tipping it into recession,” according to the article.

But there’s also some positive news for Germany despite some ongoing economic issues: the labor market is reportedly “solid” and unemployment in the country is actually near a record low of just 3.1 per cent. That’s “well below the eurozone average of 7.4 per cent - while businesses grapple with worker shortages in some areas,” according to the Financial Times.

Interestingly, it appears that there may be a skilled worker shortage in Germany, which is creating a need by companies to keep their employees at all costs. “Despite a year of industrial downturn ‘companies are trying to keep to their current employees because there is a shortage of qualified ones,’” said Carsten Brzeski, chief economist for Germany at ING in an interview with the Financial Times.

The article goes on to describe more about the labor market in Germany, which uses a tactic called “Kurzarbeit, [which means] short-time work, a government-subsidised programme that enables companies to reduce employees’ working hours without having to lay them off.”

For example, the number of short-term workers in October has actually risen approximately 62,000, according to the Financial Times. Meanwhile, there are specific industries that tap into these types of employees more than others, such as in manufacturing. “About 8.5 per cent of companies in the manufacturing sector expect to introduce short-time work in the next three months, the highest proportion since the beginning of 2013, according to the closely watched Ifo survey.”

Asia-Pacific

Despite ongoing political protests in the region, Hong Kong is enjoying some economic gains recently in the form of manufacturing jobs returning to the region from mainland China. According to the South China Morning post, “Hong Kong’s exports have grown rapidly in the past two decades thanks to China’s fast economic growth and the tightening of the city’s relationship with the mainland.”

And it appears that Hong Kong is poised to continue seeing economic growth in the manufacturing industry going forward. “Hong Kong seems to be a springboard for mainland China’s exports into the US,” said Alicia Garcia-Herrero, Asia-Pacific chief economist at Natixis. “Its role has so far served different stakeholders well, but this might change due to the growing risks of a new cold war, this time between the US and China.”

While there’s certainly a bright spot for Hong Kong with more jobs returning to the region, other outlets are reporting that its overall economy continues to suffer. “Beyond Hong Kong’s current political turmoil, a long list of economic problems await the city’s current and future rulers,” according to Bloomberg.

Americas

In the United States,  the September Employment Situation showed a total nonfarm payroll job increase of 136,000, which is slightly higher than the August report that saw a 130,000 raise. However, this number notably failed to meet estimates, according to numerous media reports which had predicted around 145,000 new jobs. The unemployment rate did however drop to 3.5 per cent.

U.S. President Donald Trump announced Wednesday his plans to lift tariffs on Turkey, which could be a boon to the economy. “The sanctions will be lifted -- unless something happens that we’re not happy with,” Trump said Wednesday in a statement from the White House, according to a report from Bloomberg.

As the publication notes, the deal is somewhat related to whether or not Turkey resumes attacks on the Kurds. “The U.S. imposed sanctions on Turkey on Oct. 14, including penalties against three government ministers,” according to the article.

Meanwhile, in Latin America, there’s some economic uncertainty for the country due to trade, according to Reuters. “Mexico’s peso is headed for choppy waters in what remains of 2019 as the ongoing U.S.-China trade war and the uncertain fate of the new North American trade deal could cause the currency to fluctuate between 18.80 and 21 per dollar, analysts say,” according to the publication.

However, it’s notable that there has been optimism in recent days. In fact, the peso on Tuesday reached “19.0817 to the dollar, its strongest level in nearly three months.”

 

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