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As we move into the festive period and the Christmas music is on overplay in supermarkets, radio stations and lifts across Asia it is a good time to reflect on what has been one hell of a year. This time last year, only the brave, misinformed or crazy would have predicted that Leicester City would have won the English Premier League (EPL) in 2016. The minnows of the EPL marched to one of the greatest upsets we have seen in the sporting world; and in many ways paved the way for two more seismic upsets that have shaken the world to its very core.
On 23rd June 2016 I watched our Cobalt Singapore team as they were transfixed by the BBC live news updates as the Referendum results started to roll in to reveal whether Britain would remain or leave the European Union. Before we got the whiff of a leave victory I was amazed by the interest shown by all the consultants in the office regardless of where in the world they were from.
Emotions were high, opinions were shared and it was clear that everyone had a real interest in this event and what the impact would be on Cobalt Singapore, Singapore in general and the recruitment markets that we cover. As the day drew on it was the same disbelief that saw Raneiri lift the EPL trophy for the first time which took over; Farage, Boris and his colleagues had engineered the impossible and Britain was heading for Brexit. The markets reacted, shares plummeted and the British Pound dropped to a 30 year low against the US Dollar.
It was in the days following Brexit that murmurings of the even-more impossible started to surface; a Donald Trump victory over Hilary Clinton in the US Presidential Election. The day came, the impossible happened, the Trumpinator had out-foxed Clinton and the US nation, the world end was nigh and life was over as we knew it.
So where does this leave us?
Well the reality is that the recruitment industry is one of the best barometers for the real health of an economy. When uncertainty or fear of real recession abounds, one of the first things that people stop doing is hiring. See the share performance of the likes of Michael Page and Hays when the GFC really took hold in 2008 for evidence. As things stand in November 2016 Cobalt has some good news. Our clients, both large and small, are still hiring across multiple sectors. Cobalt’s job numbers remained steady through Q3 and they have actually started to increase in Q4 and, away from the still very slow Oil & Gas Sector, the market feels stable and that stability appears likely to sustain itself and improve slowly in 2017.
Yes it has been a challenging year and growth has slowed but this has to be viewed against the backdrop of the fact that, since gaining independence in 1965, Singapore’s economy has grown rapidly to the point where the country has now one of the highest GDP per capita in the world. We await to see what happens in 2017 but Brexit’s impact should be minimal with just 1% and 2% of exports and imports to and from the UK making up the Singapore trade sheet.
The uncertainty of what Trump as President presents is the biggest issue we face at the moment; will he live up to some of his outrageous claims and promises? I suspect there is a moderate side that Trump will show and in the meantime Singapore has its own challenges, many of which are not insurmountable. With growth predictions of between 1.8 and 2.0% there is room for optimism with several trump (no pun intended) cards up their sleeves, none more than a potential end to Cooling Measures. South East Asia will become more reliant on Singapore in light of the US election and this could spell increased opportunities for investment in real estate, manufacturing, R&D and pharmaceutical.
At Cobalt, our outlook is one of tempered optimism as we see a continued rise in jobs (our greatest barometer) and steady growth in headcount. We are fortunate in that we are not really exposed to the weakness of the Oil & Gas space, in fact, across our core areas of focus, there has been growth in various pockets. Within real estate development, investment has continued, both in Singapore and across Asia generally. On the financial services side, demand for compliance, regulation, risk and cutting edge financial technology specialists has increased from both banks and funds. Venture capital activity has also continued to increase and the major investment groups are still looking to improve their portfolio and asset management talent pools.
There may well be some uncertainty in the air but it is clear that Singapore is definitely hiring and there are still excellent opportunities for professionals to command pay increases or move into new and improved roles.
Article written by Marcus Davies-Bateman, Director and Head of Cobalt Asia
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