The net employment outlook for Q3’19 in Romania increased by 2pps q/q to 14% in Q3, but remained relatively stable y/y, according to the latest Manpower Employment Outlook Survey. Hiring mood for Q3 in Romania is upbeat in all regions, especially in Bucharest and surrounding areas, where the net employment outlook is at 21%, up by 9pps q/q.
Looking at economic sectors, the strongest hiring optimism is in retail (29% net employment outlook for Q3), supported by an expected inflation moderation that should stimulate consumption, with direct impact on hiring. A rising hiring mood is also in manufacturing (27% net employment outlook), also resulting from slower inflation. In addition, manufacturing requires constant skills adaptation which increases difficulties in finding talented staff, so more than 25% employers in manufacturing plan to hire in Q3, the survey noted. On the negative side, the gloomiest hiring intention is reported in electricity, gas and water supply, with a negative net employment outlook of 11%, notably down by 17pps y/y. As for company size, the net employment outlook remained positive for three categories of companies. Only employers in micro-firms report a negative 2% net employment outlook, in a sluggish hiring climate.
Generally, the business environment seems to regain optimism, following a rather lethargic mood in most of sector at the beginning of 2019, when uncertainties spiked. A visible softer stance regarding the fiscal policy probably revived employers’ optimism in spite of a still tight labor market and high labor costs under constant upwards pressure coming from the government public-sector wage increases and minimum salary rise. Companies in energy remained doubtful though, probably because authorities chose to stick with the controversial tax measures introduced in the past year in the sector. However, we note that hiring optimism is mostly fuelled by hopes that inflation will slow and by a rather positive mood regarding manufacturing activity, which should be take into consideration with more caution, in our view.