Outlook bodes well for Matchtech and Hydrogen - City Comment
4 April 2013
Economic data is somewhat mixed right now with no clear trends emerging. As the first quarter of 2013 came to an end it seems labour markets across the globe continue to remain in a state of limbo.
Thu, 4 Apr 2013 | By Kevin Lapwood, head of support services equity research, Cantor Fitzgerald EuropeEconomic data is somewhat mixed right now with no clear trends emerging. As the first quarter of 2013 came to an end it seems labour markets across the globe continue to remain in a state of limbo.
To gain better clarity we look at the Manpower Quarterly Employment outlook survey, which in our view is one of the most useful surveys for the industry given its forward looking approach. In tune with the comments we are hearing from the frontline, the latest Manpower Net Employment Outlook Survey found that hiring intentions across the globe for 2Q13 are expected to be subdued as the continuing macroeconomic uncertainty weighs on management’s hiring confidence.
On a regional basis, the weakest net employment outlook remains in Europe, particularly in Italy and Spain, where the Q2 2013 outlook is at its weakest. However, within the UK, despite fears of a triple dip recession, the outlook is at its strongest since the recession. In our view, this bodes well for some of the smaller cap recruiters, such as Matchtech and Hydrogen, who have greater exposure to the UK markets.
Some positive news has also come in from our cousins across the pond, where the S&P 500 is near peak levels and tentative signs of optimism from the American employer has led to a +11% net employment outlook for Q2 2013. In addition, the ADP National Employment Report, despite a slightly disappointing March, reported an average gain of 191,000 new US private sector jobs per month in Q1.
In Asia-Pacific, the Manpower Net Employment Outlook strengthened in four of the eight countries and territories, but of particular note is employment confidence in Australia, which remains at its weakest level since Q3 09. APAC is a growing region for many of the larger cap recruiters and we now wait with bated breath for the upcoming trading updates, which should provide some clues as to how the ‘return to work’ after the Chinese New Year has been.
Since our last column, we have had results from Hydrogen Group, the specialist professional recruitment business. Despite the challenges facing recruitment markets in H2 2012, Hydrogen posted encouraging full year 2012 net fee income growth of +5%, driven by a 12% increase in permanent placements. It seems that despite the lacklustre state of the employment market, there continue to be some signs of life within the more niche recruitment areas.
To gain better clarity we look at the Manpower Quarterly Employment outlook survey, which in our view is one of the most useful surveys for the industry given its forward looking approach. In tune with the comments we are hearing from the frontline, the latest Manpower Net Employment Outlook Survey found that hiring intentions across the globe for 2Q13 are expected to be subdued as the continuing macroeconomic uncertainty weighs on management’s hiring confidence.
On a regional basis, the weakest net employment outlook remains in Europe, particularly in Italy and Spain, where the Q2 2013 outlook is at its weakest. However, within the UK, despite fears of a triple dip recession, the outlook is at its strongest since the recession. In our view, this bodes well for some of the smaller cap recruiters, such as Matchtech and Hydrogen, who have greater exposure to the UK markets.
Some positive news has also come in from our cousins across the pond, where the S&P 500 is near peak levels and tentative signs of optimism from the American employer has led to a +11% net employment outlook for Q2 2013. In addition, the ADP National Employment Report, despite a slightly disappointing March, reported an average gain of 191,000 new US private sector jobs per month in Q1.
In Asia-Pacific, the Manpower Net Employment Outlook strengthened in four of the eight countries and territories, but of particular note is employment confidence in Australia, which remains at its weakest level since Q3 09. APAC is a growing region for many of the larger cap recruiters and we now wait with bated breath for the upcoming trading updates, which should provide some clues as to how the ‘return to work’ after the Chinese New Year has been.
Since our last column, we have had results from Hydrogen Group, the specialist professional recruitment business. Despite the challenges facing recruitment markets in H2 2012, Hydrogen posted encouraging full year 2012 net fee income growth of +5%, driven by a 12% increase in permanent placements. It seems that despite the lacklustre state of the employment market, there continue to be some signs of life within the more niche recruitment areas.
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