China’s job market has worsened amid trade war, sharper slowdown ahead, Nomura report suggests
- Online searches for the word lay-off surged to a record high in December
- Report forecasts first-half growth to drop below 6 per cent from 6.8 per cent in 2018
A recent surge in online searches for keywords such as “lay-offs” and “job seeking” suggests the job market in mainland China has deteriorated amid its ongoing trade war with the United States.
According to a report released on Friday by Japanese investment bank Nomura, searches by Chinese internet users for the word lay-off have surged since October last year, reaching a record high in December. Similarly, searches for the words job seeking have risen since November and hit a record high in January.
“Although downward pressure on employment has yet to be fully felt and fully reflected in
headline statistics, we believe it will become more problematic for policymakers in the
quarters ahead, amid a likely sharper growth slowdown,” the report said, forecasting a sharper slowdown in first-half growth, to below 6 per cent from 6.8 per cent in 2018.
The report is based on the Baidu Index, which is compiled by the Chinese search engine based on the number of searches made.
Beijing discloses the official unemployment rate on a monthly basis, but analysts have challenged the reliability of this data, saying that the government is known to have “massaged numbers” to bolster confidence on previous occasions.
“Increasing concerns about the quality of official statistics on the labour market have encouraged us to track trends in China’s labour markets through other data sources,” said the report.
Officially, the unemployment rate in China’s urban areas stood at 4.9 per cent at the end of last year, according to a survey by the National Bureau of Statistics that covered 31 provincial capitals and municipalities.
The report said the frequency of searches for lay-offs surged from an index number of 403.8 in October to 598.1 in November, and then to a record high of 1,549.8 in December. But these searches eased off to 1,114.1 in January, owing perhaps to the Lunar New Year holiday.
The frequency of searches for job seeking jumped from an index number of 25,654.6 in November to 45,970.3 in December, and then to a record high of 101,045.2 in January, more than doubling a previous peak in March 2015, of 45,726.1. The index number is based on how many times a term is searched.
These searches usually spike during the spring job recruitment season, February and March, and the summer graduation season, June and July.
Meanwhile, searches for keywords related to employers such as “default”, “shutdown” and “bankruptcy” also recorded rapid increases, according to the report.
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Coastal provinces, where exports play a bigger role in the local economy, suffered more from weaker labour markets and growth, according to the report. Among the searches in 2018, most queries for “unemployment” were concentrated in coastal provinces led by Guangdong, Jiangsu and Zhejiang, while those for lay-offs were concentrated in Beijing, Guangdong and Shanghai.
Searches for the word default were concentrated among users in Guangdong, Beijing, Shanghai and Zhejiang, while those for bankruptcy were more from Guangdong, Jiangsu, Beijing and Zhejiang, the report said.