(Reuters) - Global recruitment company PageGroup (PAGE.L) said uncertainty around Britain’s exit from the European Union had taken a toll on the country’s job market, and it was seeing slower business in China due to the trade war with the United States.
British-based PageGroup, which competes with Robert Walters (RWA.L), SThree (STHR.L) and Hays (HAYS.L), follows some other recruiters that have warned that economic challenges are curbing recruitment.
“Headlines of global disruption or political instability, such as Brexit, trade tariffs and social unrest in France and broader macroeconomic uncertainties do not encourage candidates to make job moves or for clients to make hiring investments,” PageGroup’s Chief Executive Officer Steve Ingham told Reuters.
“I have concerns that if uncertainty continues throughout the year it is going to be another challenging year and we’ve had three so far.”
Despite those challenges, the company which places employees in sectors from banking and financial services to oil and gas, reported a 15.4 percent jump in gross profit to 211.1 million pounds ($271 million) in the fourth quarter.
PageGroup's shares, however, fell 5.4 percent to 439.8 pence to the bottom of London's midcap index .FTMC as surprisingly weak China trade data had investors fretting about slowing global growth and weaker-than-expected earnings.
The company said profit from the UK grew 2.1 percent in the fourth quarter from a year earlier, for a second consecutive quarter of marginal growth, although Ingham said candidates in senior positions in Britain, with mortgages and financial responsibilities, were nervous and staying put in current roles.
GRAPHIC: UK recruiters feel Brexit pinch - tmsnrt.rs/2RPMJNq
The UK accounts for around 16 percent of profit, while Asia Pacific as a whole including Greater China contributes 20 percent.
Local businesses in Britain, which do not export products, were still hiring, while international companies were more cautious given uncertainty about the terms of Britain’s planned departure from the EU at the end of March.
However, these businesses had not frozen hiring, Ingham said, and unlike Robert Walters, PageGroup said very few of its clients were shifting jobs out of London to other parts of Europe ahead of Brexit.
“Are we seeing jobs leave our shores and turn up in Paris and Germany? Almost zero,” Ingham said.
Growth in China was a concern, Ingham said, after PageGroup reported its profit in Greater China grew 12 percent in the fourth quarter, slowing sharply from a 31 percent increase in the third quarter.
“If it ends up materialising into a big trade war, if there is a big standoff in tariffs, it is only going to continue to create anxiety amongst candidates and clients and that’s not good news,” Ingham said.
China’s exports unexpectedly fell in December, by the most in two years, data on Monday showed, with imports also contracting, pointing to further weakness in the world’s second-largest economy in 2019.
In France, which accounts for 17 percent of group profit, PageGroup’s fourth-quarter profit rose 10 percent despite disruption from the “yellow vest” protests.
Profit from Germany rose 28 percent, even as growth in Europe’s largest economy slowed sharply in the second half of last year.
($1 = 0.7797 pounds)
Reporting by Sangameswaran S and Noor Zainab Hussain in Bengaluru and additional reporting by Pushkala Aripaka; Editing by Bernard Orr and Susan Fenton