Stable rice bowl

Though the economic outlook remains uncertain for the city, the local labour market is expected to remain stable with less liquidity 

For Ms. Chan, who is now working in a back office department in a resort operator, one of her New Year’s wishes is to have better luck in her career. “My colleagues and I are all overworked,” Chan, who is still in her twenties, complained. “The works seem to never end, but our team is strained.” 

While her team did not have the budget for an additional headcount last year, she doesn’t think the situation will likely improve this year. “The profit forecast [for my company] and the industry as a whole does not change much [in 2020],” she added. 

What she said does not seem to be far from the reality of the local labour market. Amid the lingering economic uncertainties, pundits believe the city’s unemployment rate will remain at a low level this year but the labour demand, in particular some sectors, might become lower. 

From the continuous trade war between China and the United States, to the slowing economy in Mainland China to other factors, Macau’s economy has shrunk for three consecutive quarters through September 30, marking the city entering a technical recession. Given the persistent lacklustre performance of the gaming industry — the gross gaming revenue declined by 2.4 percent year-on-year in the first 11 months of 2019 — the city’s gross domestic product (GDP) was likely to remain in the negative territory in the fourth quarter. 

Albeit, with the less than bright economic fundamentals in 2019, the labour market has so far remained stable. Latest government figures show the city’s unemployment rate has maintained at 2 percent or below since June 2012. 

“I don’t see any drastic rise in the unemployment rate in the near future, given the unbalance in the labour demand and supply,” said Jack Chang Chak Io, vice president of the Macau Association of Economic Sciences. “The labour market will remain stable, despite a possible little rise in the unemployment rate.” 

Halting recruitment 

Even if the economic outlook worsens in the future, the economic scholar does not believe there will not be any massive lay-offs. “As the licenses of the gaming operators are subject to renewal, the operators — one of the largest employers [here] — won’t risk sacking any staff in large-scale,” said Mr. Chang. 

He refers to the city’s six gaming concessions and sub-concessions, which will expire by 2022. Though the administration has yet to define any criteria for the renewal process, the officials have said the support for the local gaming workers, small-and medium-sized enterprises (SMEs) and the community would be important. 

“But I’m aware that many gaming operators have already halted the external recruitment procedures amid the current economic fundamentals,” said Mr. Chang. “Some retail business and SMEs might want to cut headcounts, should the economic conditions worsen.” 

The city’s retail sales have declined by three consecutive quarters as of the July-September period of 2019, the longest losing streak since the third quarter of 2016 when the city was affected by the anti-corruption campaign in the mainland, latest official data show. The retail sales totalled MOP18.06 billion (US$2.26 billion) in the third quarter of 2019, down by 0.5 percent from the previous year. 

Low vacancy rates 

Lei Cheok Kuan, chairperson of the Industry and Commerce Federation of Macau Central and Southern District, noted local SMEs have been struggling to stay afloat in recent times. “The economic figures of the city have so far been not bad, but this only means the business of the resorts and gaming operators, accounting for a large proportion, have not been severely impacted,” he said. “The SMEs, on the other hand, have been crying out for help.” 

“We only hope the downward adjustment period of the economy will end soon,” he continued. “There has lately been some good news about the trade war, which I hope could stimulate the market and revive the consumption power of travellers.” 

With the trade war lasting for more than a year negatively affecting both the United States and China, as well as the global economy, the world’s two largest economies announced in December both sides have reached a phase-one trade deal, but the details have not been unveiled yet. 

“If the economy continues to deteriorate, there’s no doubt that the SMEs will start to sack some staff,” Mr. Lei noted. 

Latest official data indeed show the labour demand in some sectors has begun to slow. According to the Statistics and Census Service, the job vacancy rate in the Macau hotel industry stood at 2.2 percent by September 2019, down by 1.8 percentage points year-on-year, while the vacancy rate in the food and beverage sector amounted to 6.6 percent, also down by 1.8 percentage points over the same time period. Both figures respectively represented the lowest vacancy rate on record in the two sectors since such official data was available in 2008. 

For the gaming industry and retail sector, the latest job vacancy rate was 1.5 percent and 8.3 percent respectively by June 2019, down 0.8 percentage points and 0.5 percentage points from December 2018. 

Demand uptick 

Tilothy Lao, customer service manager at job recruitment website, noted that some large brands in the retail sector have temporarily halted their expansion plans in the city in recent times. “We’ve noted the retail brands have become more cautious in regard to investments, so they might not have huge manpower demand [this year],” he said. 

“I expect the demand for sales assistants in shops will drop by 5-10 percent” in 2020, compared with last year, he noted. But he added the demand for supervisors and managers in the retail segment will remain strong, as the supply with suitable requirements for these positions will remain tight. 

“Because of the continuous uncertainties about the economy, there will be less job hopping [in 2020] in general,” Mr. Lao remarked. 

Jiji Tu, managing director of another manpower firm, MSS Recruitment, also believes the labour market will remain “pretty stable” this year, highlighting the manpower demand will grow stronger in the second half of 2020 over the opening of new resort projects in Cotai. 

The Grand Lisboa Palace, the first flagship HK$39-billion project of gaming operator SJM Holdings Ltd in Cotai, and the nearby HK$5-billion Lisboeta Macau, are both expected to become operational this year. 

“Whenever a new project opens, an operator has to recruit staff to man all types of positions in numerous sectors, which will tighten the labour market,” said Ms. Tu. “With the opening of the Grand Lisboa Palace and Lisboeta Macau, as well as the Phase 3 of Galaxy Macau in 2021, the liquidity in the labour market will become higher in the second half of 2020.” 

Salary hike 

With a 3.4-percent rise in the salaries for civil servants this year, observers believe the gaming operators and other businesses in the private sector might follow suit. 

Despite the economic downturn, the government announced in November the salary index for public workers would increase from MOP88 (US$11) a point to MOP91 starting from 2020. In the wake of the government’s move, now all eyes are on gaming operators, another large employer in the city. 

In the past, traditionally, gaming companies would follow the administration in enhancing the staff salaries most of the time. For instance, gaming workers enjoyed a salary rise of at least 2.5 percent last year, following the hike of 3.5 percent for civil servants. 

Power of the Macau Gaming Association, a local group for gaming employees, has recently petitioned to the new Macau chief executive, Ho Iat Seng, that the government should pressure the gaming operator to enhance the salaries by 3-5 percent this year for workers to offset rising consumer prices and economic uncertainties. 

“As gaming is the leading sector here, if the gaming operators do not adjust upwards the wage the other private businesses will also follow suit,” said Stephen Lau, chairperson of the group. 

Latest official figures show the median monthly earnings of the employed population reached a historic high of MOP17,000 by the third quarter of 2019, rising by 6.25 percent from the previous year, while the median monthly earnings of resident workers stood at MOP20,000 by the July-September period, remaining unchanged from the previous year. The median monthly earnings of gaming workers also maintained at a historic peak of MOP20,000 in the third quarter of last year. 

Jiji Tu, managing director of MSS Recruitment, noted many companies now wait and see whether gaming operators will raise salaries, which will be a reference for the private sector.