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EMEA Economic Insight June 2010


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June 2010 edition. Economic insight into the current EMEA region (europe, africa and middle east). Regional Statistics, employment news and current legislation affecting the jobs economy.

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EMEA Economic Insight June 2010

  1. 1. Manpower EMEA Economic Insight Issue 3. June 2010 EMEA Macro Economic Insight EA16 unemployment rate at 10.1% and at 9.7% in the EU27 The EA16 seasonally-adjusted unemployment rate was 10.1% in April 2010, compared with 10.0% in March. It was 9.2% in April 2009. The EU27 unemployment rate was 9.7% in April 2010, unchanged compared with March. It was 8.7% in April 2009. Eurostat also estimates that 23.311m men and women in the EU27, of whom 15.86m are in the EA16, were unemployed in April 2010. Compared with March 2010, the number of persons unemployed increased by 25,000 in both the EU27 and the EA16. Compared with April 2009, unemployment went up by 2.4min the EU27 and by 1.275m in the EA16. Among Member States, the lowest unemployment rates were recorded in the Netherlands (4.1%) and Austria (4.9%), and the highest rates in Latvia (22.5%), Spain (19.7%) and Estonia (19.0% in the rst quarter of 2010). Between April 2009 and April 2010, the unemployment rate for males rose from 9.0% to 10.0% in the EA16 and from 8.7% to 9.8% in the EU27. The female unemployment rate increased from 9.5% to 10.2% in the EA16 and from 8.7% to 9.5% in the EU27. In April 2010, the youth unemployment rate (under-25s) was 20.0% in the euro area and 20.6% in the EU27. In April 2009 it was 19.3% and 19.2% respectively. The lowest rate was observed in the Netherlands (8.0%), and the highest rates in Latvia (44.6% in the rst quarter of 2010), Spain (40.3%) and Estonia (39.8% in the rst quarter of 2010). By contrast in the USA, the unemployment rate was 9.9% in April 2010 and in Japan it was 5.0% in March 2010. Industrial producer prices grow Volume of retail trade down by 1.2% in both EA16 and EU27 by 0.9% in EA16 & 1.0% in EU27 In April 2010, compared with March 2010, the volume of retail In April 2010 compared with March trade decreased by 1.2% in both the EA16 and the EU27. In 2010, the industrial producer price March retail trade rose by 0.5% in both zones. index rose by 0.9% in the EA16 and by 1.0% in the EU27. In March, In April 2010, compared with April 2009, the retail sales index prices increased by 0.6% and 0.8% declined by 1.5% in the EA16 and by 1.6% in the EU27. Among respectively. In April 2010 com- the Member States for which data are available, total retail trade pared with April 2009, industrial fell in fourteen and rose in ve. The highest decreases were producer prices gained 2.8% in the observed in Poland (-8.7%), Denmark (-8.6%), Slovakia (-3.6%) EA16 and 3.7% in the EU27. and Spain (-2.1%), and the largest increases in Belgium (+1.8%) and Germany (+1.0%). Unit Labour costs increase The OECD has reported that since EA16 and EU27 GDP up by 0.2% the start of the economic crisis in GDP increased by 0.2% in both the EA16 and the EU27 during the third quarter of 2008, unit labour the rst quarter of 2010, compared with the previous quarter, costs (ULC) have risen by 2.3%, according to Eurostat, the statistical of ce of the European 3.7%, 4.5% and 4.6% in France, Union. In the fourth quarter of 2009, growth rates were +0.1% Italy, Germany and the United King- in the EA16 and +0.2% in the EU27. Compared with the rst dom respectively and has fallen by quarter of 2009, seasonally adjusted GDP increased by 0.6% 1.8% in Japan and by over 2.4% in in the EA16 and by 0.5% in the EU27, after -2.1% and -2.3% the United States. The ULC index respectively for the previous quarter. By comparison in the measures change in the ratio of United States GDP increased by 0.8% during the rst quarter total labour costs to real output. of 2010, after +1.4% in the fourth quarter of 2009 and in Japan An increase in ULC indicates that GDP increased by 1.2% in the rst quarter of 2010, after +1.0% growth in remuneration and social in the previous quarter. charges exceeds the growth in labour productivity. How does this all relate to Manpower? Why not refer to the latest Q3 2010 MEOS Reports which are available from
  2. 2. Manpower EMEA Economic Insight Issue 3. June 2010 UK: Estonia: EMEA Country Insight Wholesale pension review EA16 to become EA17 on 1st January 2011 The new UK government is undertaking a whole- Estonia is set to become the Eurozone's 17th sale review of pension legislation with special member on 1 January 2011, after a vote by EU emphasis on the statutory retirement age. Current nance ministers. The Baltic state has xed its legislation means that pensionable age will be currency - the kroon - to the Euro ever since the equal for men and women by 2020 and thereafter single currency's inception in 1999. However will rise to 66 between 2024 and 2026. However Estonia was unable to fully join the Euro, as its government of cials have indicated that the UK in ation rate was deemed too high. But thanks may follow the Danish system of indexing the pen- to the global recession, the country has nally sionable age in line with longevity projections. met the in ation criterion for inclusion in the Eurozone. Italy: Public sector salary reviews The Netherlands The Italian government has followed the example Wage agreements for temporary labour of other European nations and frozen public sector The Dutch Association of Temporary Employ- salaries until 2013 as well as cutting the salaries of ment Agencies (ABU) has agreed an increase in high-earner civil servants by 10%. There is also a salary for temporary employees in the Nether- freeze on public sector appointments until 2013 as lands following the traditional annual collective well as an increase in the retirement age for wom- bargaining process with various trade unions. en employed in the public sector to 65 by 2016. The collective agreement will now be followed by a general declaration issued by the Dutch Serbia: government making it binding on all temporary Easing of public sector pay constraint work agencies operating in the country. From 5 The IMF has agreed that Serbia may end its freeze July 2010 temporary employees will receive a on public sector pay and state pensions imposed +1% increase in pay to be followed by a further last year as a condition of the IMF's bailout loan. increase of +0.5% in January 2011. From next However it remains unclear whether the entire pub- July there will be a new index as a basis for pay lic sector or just government of cials will bene t rises - developed from pay trends in the sectors from this latest decision. where temporary workers are currently princi- Sweden: pally deployed. Induction courses for new immigrants Spain The Swedish government is looking to recommend Labour market reforms to go ahead that all 40,000 immigrants who arrive in Sweden The Spanish Prime Minister has announced each year with a residence permit of 12 months that the government will approve labour mar- or more should undertake a mandatory induction ket reforms whether or not there is agreement course on the national constitution, the welfare with unions and employers. Recent tri-partisan state and “everyday Swedish life”. negotiations failed due to strong disagreements Italy: between employers and union representatives. New fund for disabled workers A fund has been established to support workers Labour market reforms, bank re-structuring and with disabilities. Grants can be claimed for work- a reduction in the national de cit are regarded place changes which have to be made for people as essentials to solve Spain’s economic prob- whose ability to work is reduced by more than half lems and pulling the country out of its worst because of their disability. Items such as improve- recession in decades. Current austerity mea- ments in access to working areas, technological sures seek to cut spending by at least €15bn. aids and the additional cost of insurance against The new austerity bill has introduced immediate accidents at work are all covered in the scheme. public sector salary cuts for civil servants and This coincides with the EU’s intention of ratifying government ministers. The cuts ranging from the UN Convention on the Rights of Persons with less than 1% to 15% will remain in effect until Disabilities by the end of 2010. The Commission is the end of 2011. Although unemployment fell by currently drawing up a new Disability Strategy with just over 76,000 last month there are still over plans to introduce new measures to increase the 4m unemployed in Spain. The latest fall is widely employment rate of disabled people. reported to be a seasonal blip rather than based on a general upturn in the economy.
  3. 3. Manpower EMEA Economic Insight Issue 3. June 2010 International Labour Organisation calls for balanced policy. EMEA Employment Insight The Director-General of the International Labour Organisation (ILO) Juan Somavia has called for a ‘balanced’ policy strategy aimed at securing a ‘jobs-rich’ economic recovery in the face of new threats to the global economy from the sovereign debt crisis and scal retrenchment. Speaking recently at the opening of the ILO’s International Labour Conference, Mr. Somavia warned that the debt crisis and de cit reduction measures, mainly in social spending, could ‘directly affect jobs and salaries’ at a time of weak economic recovery and continued high levels of unemployment. Mr. Somavia called for a ‘balanced policy convergence strategy’ based on three elements: securing a job-rich recovery, moving onto a path of strong, sustainable and balanced growth, and addressing the structural imbalances of the global economy that existed before the crisis. “We need to act on all three objectives together in a harmonious way within a short, medium and longer-term perspective,” Mr. Somavia said. “They are all interconnected.” “The immediate danger of a simultaneous scal retrench- ment in a signi cant number of countries is to slow down Europe’s weak recovery even more. In turn, this would damage in different ways growth prospects around the world. A contagion effect cannot be ruled out.” Mr Somavia went on to say “there is no doubt that the public debt and public de cit problems of many countries are real and need to be dealt with, as both a national and a global stability issue. The question is how and in what time frame.” Q3 2010 MEOS Results released Employer hiring plans remain mixed across the 18 countries surveyed in the latest EMEA MEOS which has just been released. There are positive signals in the labour market with third-quarter hiring activity expected to be positive in 13 out of the 18 countries surveyed. In comparison to last year at this time, when employers in 13 countries were reporting negative hiring expectations, only those in four report negative Net Employment Outlooks: Italy, Ireland, Spain and Greece. Meanwhile, year-over-year improvements are forecast for 14 countries. Hiring activity in the region is expected to be strongest in Poland, Germany and Sweden. Manpower Inc. Chairman and Chief Executive Jeff Jeorres said “Europe, despite all the recent bad news, is showing some improved demand for product, as evidenced by employers’ increased appetite to hire in the Manufacturing sector, with 16 of 18 countries showing more optimism in their hiring plans. German employers continue to indicate more positive hiring prospects than their European neighbors with almost all sectors improving and particular sector strength in Wholesales/Retail hiring. While our survey was conducted prior to the recent events in Greece, the results are still relatively re ective of the current challenging environment.” For details about how this all relates to Manpower, why not refer to the latest World of Work trends? Numerous reports are available from the research centre at