The Edge Magazine Vol. 6

GROWTH IN OFFICE-BASED EMPLOYMENT

Unemployment forecasts show that labor markets are expected to tighten across the region, with most registering unemployment rates at or below their respective five- year averages (Figure 1). However, aggregate figures of unemployment hide finer details highlighted in the ‘K-shaped’ recovery that has already revealed weakness in retail, tourism and service-oriented sectors compared to tight labor conditions in professional services, IT, finance and manufacturing. There is an increasing mismatch between required business skills and the available labor force which has intensified the war for talent. Beyond this, evidence from a global study shows that 41% of the workforce is considering changing jobs within the next 12 months—during the so-called ‘Great Resignation.’ While this originated in the U.S., there is mounting evidence that it will also sweep through parts of Asia Pacific. Fundamentally, the key message here is that corporate occupiers should prioritize talent retention and attraction in the immediate term as well as enhancing productivity through investment in technology and real estate. Unemployment forecasts out to 2025 suggest that unemployment will stabilize around the same levels forecasted towards the end of 2022. Furthermore, office employment across Asia Pacific is forecast to grow at more than twice the rate of total employment at 2.1% per annum and 0.8% per annum respectively. The mismatch is especially stark in mainland China as employment moves up the value chain and greater proportions of workers enter office-based employment. In absolute terms, office-based employment is forecast to increase by more than 12 million workers by the end of 2025, with the majority accounted for by growth in mainland China and India.

Office employment across Asia Pacific is forecast to grow at more than twice the rate of total employment at 2.1%per annumand 0.8%per annum respectively.

FIGURE 1: UNEMPLOYMENT RATE OUTLOOK, END-2022 COMPARED TO A 5-YEAR AVERAGE

12%

2015-19 average

2022 outlook

10%

8%

6%

4%

2%

0%

India

Japan

Vietnam

Malaysia

Thailand

Australia

Indonesia

Singapore

Philippines

South Korea

New Zealand

Mainland China

Hong Kong SAR, China

Source: Moody’s; Deloitte Access Economics; Cushman & Wakefield

20 THE EDGE