Romanian employers forecast the weakest hiring intentions in more than four years for Q4 of 2019

According to the latest ManpowerGroup Employment Outlook Survey released today, Romanian employers report modest hiring intentions for 4Q 2019, with a seasonally adjusted Net Employment Outlook of +8 per cent. The 4Q 2019 Outlook is the weakest reported by Romanian employers in four years, declining by 4 percentage points when compared with the previous quarter and by 11 percentage points in comparison with the final quarter of 2018.

“Some sectors, such as the transport, storage & communications, wholesale & retail trade and manufacturing sectors, are anticipating notable declines in employment activity. Moreover, the forthcoming presidential elections are likely to put some businesses and investments on hold. However, it’s commonly known that this happens during elections period,” says Nuno Gameiro, ManpowerGroup South East Europe Regional Managing Director.

Regional comparisons: During the next three months, Romanian employers anticipate payroll gains in seven of the eight Romanian regions. However, hiring prospects weaken in six regions quarter-over-quarter, and decline in seven regions when compared with last year at this time. The strongest regional Outlook stands at +18% in the West, improving both quarter-over-quarter and year-over-year, by 3 and 4 percentage points, respectively. Hiring intentions are notably stronger than the national Outlook in other two regions. The North-West Outlook of +12% remains relatively stable in comparison with 3Q 2019 but dips by 4 percentage points year-over-year. In the South, where the Outlook is also +12%, hiring plans decline by 2 and 16 percentage points from 3Q 2019 and 4Q 2018, respectively.

The weakest regional labor market is anticipated in the South-East region where employers expect to trim payrolls and report a sluggish Outlook of -6%, the lowest in three years. Hiring prospects decline by 14 percentage points quarter-over-quarter and by 29 percentage points when compared with this time one year ago, anticipating the steepest decline in the region. Outlooks in a further three regions are the weakest in three years, Bucharest & Ilfov (+9%), Center (+9%) and the North-East (+3%).

Industry comparisons: Employers in nine of the 10 Romanian industry sectors anticipate payroll growth during the October to December period. Reporting a Net Employment Outlook of +19%, employers in the Construction sector anticipate an upbeat hiring pace, resulting in the strongest sector labor market for the next three months. The Outlook improves by 3 percentage points when compared with the previous quarter but declines by 11 percentage points in comparison with the final quarter of 2018.

Hiring intentions are also notably stronger than the national Romanian Outlook in two further sectors. Wholesale Trade & Retail Trade sector employers anticipate steady hiring activity, reporting an Outlook of +13%, despite decreases of 15 and 9 percentage points from 3Q 2019 and 4Q 2018, respectively. The Finance, Insurance, Real Estate & Business Services sector Outlook of +11% decreases by 4 percentage points quarter-over-quarter and is 12 percentage points weaker in comparison with the same period last year.

”It is notable that our latest survey results for the Construction industry sector reflect the positive impact of the allowances granted by the Romanian State to the construction firms, creating favourable fiscal conditions, including an income tax waiver for workers in the sector. We see that hiring intentions in Romania remain positive, although the Net Employment Outlook figure is slightly lower than in the previous quarter. Employers should consider this period of relatively weaker labor demand to focus on effective talent strategy, rethink their people practices, invest in learning and development, build inhouse talents and increase employee retention rates in order to have the talent on hand and to avoid losing business opportunities once the market will recover,” says Nuno Gameiro.

Manufacturing sector employers report their weakest hiring intentions in nine years, with an Outlook of +10%, decreasing by 14 percentage points when compared with the previous quarter and by 21 percentage points when compared with this time one year ago. Employers in the Transport, Storage & Communications sector forecast a decline in staffing levels, reporting an Outlook of -4%.

Quarter-over-quarter, outlooks weaken in seven of the 10 industry sectors, most notably by 19 points in the Transport, Storage & Communications sector. In a comparison with same period one year ago, Outlooks weaken in all 10 industry sectors, including sharp declines of 22 percentage points in the Transport, Storage & Communications sector and 21 percentage points in the Manufacturing sector.

Organization size comparisons: Employers in three of the four organization size categories report optimistic forecasts, with Large- employers and Small-size employers both anticipating positive hiring intentions with a Net Employment Outlook of +10%. Medium employers also report moderate hiring plans with an Outlook of +9%. However, Micro employers report an uncertain Outlook of -1%.

Considerably weaker hiring plans are reported by Large and Medium-sized employers when compared with this time one year ago, with Outlooks decreasing by 18 and 17 percentage points, respectively. Elsewhere, Micro employers report a moderate decline of 6 percentage points, while the Outlook for Small firms is unchanged.

International comparison: The ManpowerGroup research for the final quarter of 2019 reveals employers expect to grow payrolls in 43 of 44 countries and territories surveyed in the period up to the end of December 2019, with employers in one country forecasting no change to hiring intentions. The strongest hiring prospects are reported in Japan, Taiwan, the U.S., India and Greece, while the weakest hiring activity is expected in Spain, the Czech Republic, Argentina, Costa Rica and Switzerland.