April 18, 2008

1 in 4 employers polled expects recession soon

Health-care sector most gloomy but media, advertising sectors still upbeat

By Zakir Hussain

JUST over one in four employers polled recently expect Singapore to face a recession in the next six months, according to a survey by recruitment consultancy Hudson released yesterday.

The survey of 733 decision makers from multinationals was done in February, amid fears of a global slowdown due to troubles in the United States economy.

Especially pessimistic were health-care and life-sciences managers, with 55 per cent expecting a recession. Explaining, Mr Winston Poh, director of strategy and commercial operations at eye products company Bausch & Lomb, said investors are wary of funding new technologies that may be untested.

'Consumers may also avoid elective procedures such as Lasik surgery, because they can continue to use contact lenses or spectacles,' he said.

Among manufacturing firms polled, 38 per cent predicted a recession. But Mr Dennis Ng of the Singapore Manufacturers' Federation said although the sentiment among members was one of caution, most did not foresee a recession given the momentum of the construction boom and the economy's sound fundamentals.

Hudson's Singapore country manager Mark Sparrow said the 26 per cent expecting a recession was a 'smaller' than expected figure. 'We're experiencing people getting very nervous that a recession might come. So I was encouraged that only a quarter thought a recession would happen.'

He also thought 'the word recession might be overused, when what many mean is a slowing of the economy'.

Hudson also conducted parallel surveys among employers in the region. It found that 14 per cent of respondents in China expected a recession there, compared to 20 per cent in Hong Kong and 41 per cent in Japan.

But a recession was far from the minds of some here.

Most upbeat was the media, public relations and advertising sector, with 11 per cent expecting one. This was followed by the consumer sector at 20 per cent. Hudson put this down to large retail developments and events such as the 2010 Youth Olympics.

Some 79 per cent of those who predicted a recession said their industry would be affected.

But Mr Sparrow sees a silver lining: 'In previous downturns or crises like Sars, businesses were caught by surprise. Now that they see a slowing down, companies can have a Plan B.'

Managers polled said a recession would impact hiring and other policies: 90 per cent said they would freeze headcount, 33 per cent would freeze pay, and 19 per cent would cut staff.

But for this quarter, 49 per cent of employers polled still plan to hire more staff, compared to 56 per cent for the same period last year.

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