China job market prospects drop to record low as economy weakens

Chinese residents are experiencing the worst job market prospects on record amid a sharp slowdown in the economy, a worrying sign for officials as the Communist Party prepares to hold a key political meeting next week. 

The central bank's Employment Sentiment Index, based on a survey of depositors' outlook for jobs, declined to 35.4 in the third quarter, the lowest level since data began in 2010, according to a report published by the People's Bank of China (PBOC) on Sunday (Oct 9). Figures below 50 represent a contraction in the sector.

Some 45.2 per cent of the households polled said finding a job was "tough" or "hard to judge", and only 9.7 per cent of the respondents said it was easy to get a job. The PBOC surveys 20,000 depositors across the country every quarter.

The survey underlines dwindling confidence as growth is dragged down by repeated Covid flare-ups and a property market slump that has lasted for more than a year. Job prospects for young people are especially bleak, with the unemployment rate for those aged 16-24 at nearly 19 per cent, almost four times the official urban jobless rate of 5.3 per cent. Separate data from the purchasing managers surveys last week showed ongoing job losses in the services sector, a major employer.

Top officials have highlighted the importance of employment as a key focus for the government as they downplay growth targets. Economists surveyed by Bloomberg predict gross domestic product will grow just 3.3 per cent this year, well below the official goal of around 5.5 per cent.  

The PBOC's survey also highlights weak prospects for the housing market. Only 14.8 per cent of the respondents expected home prices to rise in the next quarter, the lowest since data began in 2010. Some 16.3 per cent of households expected home prices to fall, the highest proportion since the first quarter of 2015, while 56.6 per cent forecast no change.

The 100 biggest real estate developers in the country saw new-home sales plunge by 25.4 per cent from a year earlier in September, when transactions usually pick up, while homebuyers are citing a wider range of concerns as justification to boycott mortgage payments.

Income expectations remained close to a record low, the PBOC survey showed, although the index rebounded slightly in the third quarter to 46.5 from 45.7 in the second quarter. 

Residents also showed slightly less willingness to spend or save, and instead chose to invest more, according to the survey. The number of respondents who said they tended to increase consumption fell 1 percentage point to 22.8 per cent, while those willing to save more declined 0.3 percentage point to 58.1 per cent. Some 19.1 per cent said they are leaning toward more investment, up 1.2 percentage points. BLOOMBERG

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