China’s Labour Market picks Up in Q3 2016

November 3, 20168:33 am524 views

The job market in China had been on a cooling trajectory since the beginning of 2015, with the CIER index declining in most quarters. After a seasonal rebound to 2.09 in the fourth quarter of 2015, the CIER index dropped to 1.71 in the first quarter of 2016. As the economy stabilized, the job market improved, lifting the CIER Index for two consecutive quarters.

Excluding the effects of seasonality and changing demographics, which have traditionally resulted in a long-term rise in CIER Index scores, the quarterly adjusted CIER index has stabilized, indicating an improving labour market in China.

Zhaopin Limited, a leading career platform in China focused on connecting users with relevant job opportunities throughout their career lifecycles, and the China Institute for Employment Research (CIER)  at Renmin University have released the CIER Employment Index Report for the third quarter of 2016.

The CIER index score is calculated by dividing the number of job vacancies during a specified period by the number of unique job seekers that apply to jobs during the same period. A CIER index score of more than 1 indicates that confidence in new career opportunities is high among job seekers. A CIER index score of less than 1 indicates that confidence among job seekers is low.

According to Zhaopin’s data, total online recruitment demand increased by 35% year-over-year in the third quarter of 2016, compared with 21% year-over-year growth in the second quarter of 2016. Considering the impact of accelerating reform on China’s economic structure, more industries and enterprises have restored their growth momentum, creating greater demand for talents.

chinas_labour_market_q3_2016_11

China Third-Quarter Labour Market Highlights:

  • The labour market in China is picking up, with the CIER index rising to 2.22 in the third quarter of 2016 from 1.93 in the second quarter of 2016.
  • Internet and e-commerce continued to be the best-performing sector and energy/mineral/mining/smelting remained as the worst-performing sector.
  • Northeast China is still the region with lowest CIER index score, but the increase in recruitment demand has accelerated with more government supports.
  • While the job market in the first-tier cities of China has become more saturated, recruitment demand in the second- and third-tier cities surged.
  • Micro-sized companies continued to create tremendous job demands amid a boom in start-ups.
  • The CIER index is expected to keep the upward trend in the fourth quarter of 2016.

CIER Index by Sectors

The CIER Index ranking by sectors remains largely unchanged in the third quarter of 2016. However, the polarization trend persisted. Internet and e-commerce continued to be the best-performing sector with a CIER index of 7.28. Energy/mineral/mining/smelting was still the worst-performing sector with a CIER index of only 0.20.

In the third quarter of 2016, Internet/e-commerce, insurance, funds/securities/futures/investment, traffic/transportation and intermediary service sectors were the best-performing sectors by CIER Index rank. Internet, finance and transportation industries have been booming with the new economy, creating huge job demand.

See: Top 5 HR Jobs in Demand for 2017 in China

The worst performing sectors by CIER Index rank in the third quarter of 2016 included energy, mineral, mining, smelting, inspection/testing/authentication, printing/packaging/papermaking environmental protection, and petroleum/petrochemical/chemical, which are all traditional manufacturing industries suffering from over-capacity.

Ten best-performing sectors of  the third quarter of 2016
Ranking Sector CIER index
1 Internet/e-commerce 7.28
2 Insurance 4.90
3 Funds/securities/futures/investment 4.76
4 Traffic/transportation 4.28
5 Intermediary service 3.83
6 Farming/forestry/animal husbandry/fishery 3.76
7 Computer software 2.95
8 Media/publishing/film and television/culture dissemination 2.79
9 Logistics/warehousing 2.67
10 Professional service/consulting (finance and accounting, legal
and HR, etc.)
2.61
Ten worst-performing sectors of  the third quarter of 2016
Ranking Sector CIER index
1 Energy/mineral/mining/smelting 0.20
2 Inspection/testing/authentication 0.26
3 Printing/packaging/papermaking 0.33
4 Environmental protection 0.35
5 Petroleum/petrochemical/chemical 0.41
6 Property management/business center 0.44
7 Office supplies and equipment 0.44
8 Electricity/power/water conservancy 0.47
9 Cross-industry operation 0.48
10 Medical equipment/apparatus and instruments 0.55

chinas_labour_market_q3_2016

The real estate sector was extremely hot, with surging prices in the first-tier and the emerging first-tier cities. Total recruitment demand in the industry increased by 19% in the third quarter of 2016 year-over-year. Job demand from the emerging first-tier cities jumped 33% year-over-year with more housing supplies in key cities such as Nanjing and Hangzhou. Due to a shortage of land supplies and limited projects on sale, recruitment demand in the first-tier cities actually declined by 5% year-over-year.

The financial sector saw recruitment demand increase in the third quarter of 2016 by 26% year-over-year, below the average growth of 35% nationwide. Growth in job demand from the emerging first-tier cities and the second-tier cities was also higher than the increase in the first-tier cities. Demand from micro- and small-sized companies increased the most among companies of different sizes.

IT and internet sector continued to boom with job demand jumping 45% in the third quarter of 2016 year-over-year. Within this sector, demand in internet/e-commerce and computer software rose 55% and 49%, respectively. The growth in online games and IT service was 16% and 3% in the third quarter of 2016, respectively.

Traffic/transportation sector was under the spotlight again with recruitment demand surging 74% in the third quarter of 2016 year-over-year. The central and local governments announced new public-private partnership investments in transportation and other infrastructure projects, which are expected to create more jobs in transportation construction, rail transit operation and maintenance in the upcoming years.

The CIER index is very likely to keep the upward momentum in the fourth quarter of 2016 with the stabilizing economy, seasonality factors and the long-term demographic trend. The index identifies the overall trend in China’s employment market, and has become the leading barometer of China’s labour market and macro-economic environment.

Also read: Nearly 60% of China’s White Collar Workers Seeking New Jobs

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