China faces its worst job market in more than two decades, with tens of millions of people temporarily without work or unemployed in the first three months of 2020 and the number of jobs set to shrink by more than 10 million this year, according to UBS Group AG economists.
About 70-80 million people in services, manufacturing and construction either had lost jobs or weren’t working at the end of March because of shutdowns to contain coronavirus, according to Wang Tao and other economists at the bank.
“As economic activities normalize and with the help of policies supporting SMEs,” or small and medium-sized enterprises, “we expect these numbers to decline quickly and substantially in the coming quarters,” they wrote in a report to clients Wednesday.
Still, the deterioration in the global economy is expected to hit demand for Chinese goods from April, which likely will mean job losses at manufacturers and exporters. More than 10 million jobs are at risk, they wrote.
China’s gross domestic product will likely grow 1.5% this year, which implies the urban job market could contract by a few million, UBS estimated, instead of the net increase of 10 million or so new jobs seen in recent years. UBS’ economic growth forecast for China this year is below the consensus of around 3%.
Total net non-farm employment will decline by more than 10 million jobs, they estimate. The weaker employment and income growth will weigh on consumption even as an easing of travel restrictions releases pent-up demand, they wrote, arguing that private consumption will “decline marginally” compared to last year.
Chosen excerpts by Job Market Monitor. Read the whole story @ China Faces Worst Job Market in 20 Years as Growth Slumps: UBS – Bloomberg