Monthly EMEA Economic Insight newsletter, highlighting key economic data for the EMEA region's jobs economy.

1. Manpower EMEA
Economic InsightIssue 6. October 2010
EMEAMacroEconomicInsight
The EU has recently issued a quarterly economic update.
An abridged version of the executive summary is set out below.
Expansion in the global economy is continuing in the second half of 2010, even with some signs of
moderation in the most recent evolution of short term indicators. After the severe decline in global
growth that has been seen in 2008 and 2009, positive conditions have gradually spread from
emerging markets to advanced economies since the later months of 2009. These results have been
obtained thanks to the expansive fiscal and monetary policies and the positive inventory cycle. More
recently, signals of growth coming from several emerging countries slowed especially in Asia, whereas
major advanced economies proceed at a moderate pace for budgetary reasons. Inflationary pressures
remain rather contained, but there are signals of a recovery of commodity prices. The most recent
statistical indicators show a clear recovery of global economic activity in the first half of 2010. These
signals are of improved conditions in most of the markets with respect to one year ago. The expan-
sive macroeconomic actions recently undertaken to sustain the real economy have contributed to a
gradual upswing in the first half of 2010. However, at present, there are also a number of factors of
uncertainty in the recovery, due to the process of adjustment of balance sheets, a general underesti-
mation of the impact of the crisis on the real economy, a relatively static labour market and an increase
in manufacturing input prices.
Among the EU Member States the signals of GDP growth rate are quite diverse. In Germany after a
slow recovery starting in the second quarter of 2009, the growth rate became more sustained in the
second quarter of 2010, equal to +2.2% on a quarterly basis; in terms of annual variations the growth
rate became positive in the first quarter of 2010, +2.0%, accelerating to +3.7% in the latest quarter.
In Italy, after the slight fall of GDP in the fourth quarter of 2009 by -0.1% compared with the previous
quarter, growth turned positive in the first and second quarters of 2010 at rates of +0.4% and +0.5%
respectively. On an annual basis, growth in the second quarter of 2010 was of +1.3%. In the UK, after
its first recovery signal recorded in the fourth quarter of 2009, +0.4%, GDP increased again by +0.4%
in the first quarter of 2010 and accelerated in the second to +1.2%. (most recent figure shows an
increase of +0.8%). The quarter-to-quarter recovery is contained in Spain, with +0.1% and +0.2% in
the first two quarters of 2010, and still negative annual variations in the same two quarters, -1.3% and
-0.1% respectively. Concerning the signals coming from the new Member State economies substantial
recoveries of GDP in the second quarter of 2010 are recorded in the Baltic States, Finland, Romania
and Slovenia after several contractions or modest positive results.
To sum up, the current scenario depicts a situation in which the sustainability of the present
economic recovery in Europe cannot be confirmed, even in presence of recovery signals in the GDP
growth. The recent crisis has contributed to the strong deterioration in government deficit and debt
ratios in 2009, with a negative prospect in this respect also in the current year.
Evolution of GDP
GDP increased by 1.0% in both the Euro Area
(EA16) and the EU27 during the second quarter
of 2010, compared with the previous quarter,
according to estimates released by Eurostat.
In the first quarter of 2010, growth rates were
+0.3% in the Euro Area and +0.4% in the EU27.
Compared with the second quarter of 2009 (not
seasonally adjusted) GDP increased by 2.4%
in the Euro Area and by 2.5% in the EU27, after
+1.1% and +0.8% respectively for the
previous quarter.
Industrial production
According to revised data, in July 2010
compared with June 2010, seasonally adjusted
industrial production increased by 0.1% in
both the Euro Area (EA16) and the EU27. In
June production fell by -0.1% in the Euro Area,
while rising by 0.2% in the EU27. In July 2010
compared with July 2009, industrial production
decreased by 7.2% in the Euro Area and by
7.0% in the EU27.
Construction output down 0.4% in Euro Area but up by 0.3% in the EU27
In the construction sector, seasonally adjusted production fell by 0.4% in the Euro Area (EA16), but
rose by 0.3% in the EU27 in August 2010, compared with the previous month. In July, production
decreased by 3.2% and 2.5% respectively. Compared with August 2009, output in August 2010
dropped by 8.5% in the Euro Area and by 1.3% in the EU27.

2. Manpower EMEA
Economic InsightIssue 6. October 2010
EMEAMacroEconomicInsight
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Industrial new orders up by 5.3% in Euro Area and up
by 3.6% in EU27
In August 2010 compared with July 2010, the Euro Area
(EA16) industrial new orders index rose by 5.3%. In July
the index fell by 1.8%. In the EU27, new orders increased
by 3.6% in August 2010, after a decline of 1.6% in July.
Excluding ships, railway & aerospace equipment, for which
changes tend to be more volatile, industrial new orders rose
by 4.1% in the Euro Area and by 3.3% in the EU27.
In August 2010 compared with August 2009, industrial new
orders grew by 24.4% in the Euro Area and by 22.6% in the
EU27. Total industry excluding ships, railway & aerospace
equipment rose by 23.5% and 23.0% respectively.
Retail trade volume decreases
In August 2010, compared with July 2010, the volume of
retail trade decreased by 0.1% in the Euro Area and by 0.2%
in the EU27. In July retail trade was unchanged in the Euro
Area and decreased by 0.1% in the EU27. In August 2010
compared with August 2009, the retail sales index increased
by 0.9% in the Euro Area and by 1.3% in the EU27.
Inflation holding steady
The flash estimate for Euro Area annual inflation issued by
Eurostat in September 2010 was 1.8%. Euro Area annual
inflation was 1.6% in August, down from 1.7% in July. A year
earlier the rate was -0.2%. Monthly inflation was 0.2% in
August 2010. EU27 annual inflation was 2.0% in August
2010, down from 2.1% in July. A year earlier the rate was
0.6%. Monthly inflation was 0.2% in August 2010.
Unemployment remains unchanged
The Euro Area (EA16) seasonally-adjusted unemployment
rate was 10.1% in August 2010, unchanged compared with
July. It was 9.7% in August 2009. The EU27 unemployment
rate was 9.6% in August 2010, also unchanged compared
with July. It was 9.2% in August 2009. Eurostat estimates
that 23.066 million men and women in the EU27, of whom
15.869 million were in the Euro Area, were unemployed in
August 2010. Compared with July, the number of persons
unemployed decreased by 68,000 in the EU27 and by 20,000
in the Euro Area. Compared with August 2009,
unemployment rose by 0.894 million in the EU27 and by
0.569 million in the Euro Area.
Financial account investments continue to fall
In the second quarter of 2010, the EU27 made direct
investments abroad of €50.1bn, compared with €75.0bn
in the same quarter of 2009, while foreign direct investors
recorded disinvestments in the EU27 of €12.0bn, compared
with investments of €81.4bn in the same quarter of 2009.
EU27 current account deficit €37.1bn
(€19.3bn surplus on trade in services).
According to the latest available data, the
EU27 external current account recorded a
deficit of €37.1bn in the second quarter of
2010, compared with a deficit of €42.1bn in
the second quarter of 2009 and a deficit of
€31.8bn in the first quarter of 2010.
In the second quarter of 2010, compared
with the second quarter of 2009, the
deficits of the goods account (-€29.9bn
compared with -€14.9bn) and the current
transfers account (-€14.2bn compared with
-€11.9bn) both increased. The surplus of
the services account rose (+€19.3bn
compared with +€16.7bn), while the deficit
of the income account fell (-€12.4bn
compared with -€32.1bn).
The surplus recorded in the services
account (+€19.3bn euro) is mainly the
result of surpluses in “other business
services”, which includes miscellaneous
business, professional and technical
services (+€8.6bn), financial services
(+€6.5bn), computer and information
services (+€5.6bn) and transportation
(+€5.0bn), partially offset by deficits in
royalties & license fees (-€4.0bn) and travel
(-€3.1bn).
Low interest rates continue.
Global short-term interest rates remained
at very low levels in September 2010. The
European Central Bank’s key official inter-
est rate has remained at a historical low of
1.0% since May 2009, while the key official
rates of US Federal Reserve and Bank of
Japan have been held at 0.25% and 0.1%
respectively since the end of 2008. The
UK’s official bank rate has been unchanged
at 0.5% since March 2009.
Calls for minimum income scheme.
SIA reports that an EU resolution has been
called to introduce a minimum income
scheme across the EU. The Commission
has been asked to present an initiative as
a first step towards a minimum income
action plan, as the “2010 European Year
against Poverty” draws to a close.

3. Manpower EMEA
Economic InsightIssue 6. October 2010
EMEACountryInsight
Germany seeks mining assurances from China
The World Trade Organisation and the EU have said that
they are seeking a solution to German concerns about re-
ported Chinese restrictions on exports of rare earths com-
modities. Germany, which depends on raw materials from
abroad to power its export-driven economy, this month an-
nounced a government strategy to secure access to crucial
raw materials and called on countries to address the issue
together at international talks. Germany’s electronics indus-
try has said the market for rare earths, used to manufacture
a range of high-tech products, had become “critical” due to
reported restrictions on exports from China, which produces
97 percent of the world’s supply.
Portugal debt crisis could resurface
The minority government of Portugal has failed to gain
opposition support for its proposed austerity budget. The
Social Democrats oppose the planned tax rises by the
governing Socialists, preferring a wide range of spending
cuts. A vote on the budget is due to take place on 3rd
November. A failure to pass the revised budget could push
the country back into a debt crisis similar to that see in
Greece earlier this year.
Russian Rosneft profits more than double
Russia’s leading oil producer Rosneft has announced that
Q3 2010 earnings more than doubled on the back of in-
creased output and higher crude prices. Third quarter net
profit came to €1.8bn up 120 percent from the same period
last year. The company pointed to increased production of
crude oil and refined products as well as higher prices.
Rosneft plans to undertake investments of €18bn to develop
the giant Vankor oil and gas fields in northern Russia.
German state aided banks to have pay cap
The business daily newspaper Handelsblatt has reported
that the German government has decreed that no one at a
bank that received public funds during the financial crisis
should earn more than €500,000 per year, The measure is
expected to be approved by the lower house of parliament
in the near future and take effect early next year.
Czech labour reforms
The Czech Government has made several amendments to
the national Labour Code especially in relation to the sever-
ance and unemployment benefit system. The entitlement to
unemployment benefit has been removed until the period
covered by severance payments has come to an end and a
reduction in the unemployment benefit that can be claimed if
someone leaves their job voluntarily has also been changed.
A proposal has also been made to change fixed-term
contract duration which is currently limited to the current
maximum of two years.
Spanish Labour reforms become law
The Spanish Employment Law Reform Act
has now come into force. This retains most
of the emergency employment legislation
that was passed by the government last
June, but also includes a number of
important additions. Amongst the major
changes are schedules to increase
workforce flexibility, reduction in costs
associated with individual and
collective redundancies, increases in
incentives to hire employees with indefinite
term contracts and restrictions on the use
of defined-term contracts.
Dutch government sets out policy
The newly elected Dutch government has
announced a number of austerity mea-
sures based around employment issues.
Schemes include a long-term desire to cut
the national minimum wage as well as the
merger of a number of social, welfare and
benefit schemes.
UK minimum wage changes
From the start of October, a new minimum
wage structure was introduced into the
UK. The age for adult qualification was
decreased to 21yrs whilst payments were
increased by 2.2% to a minimum of €6.91.
Young worker rates (aged 16-17 and 18-20)
were also increased. Also added to the
minimum wage structure were apprentices,
who are now entitled to a NMW of €2.90.
Unregistered Greek workers
According to recent government figures
one in four workers in Greece is not
registered with the Greek tax office. The
majority of people working in the “shadow
economy” are in unskilled or low paid jobs
such as bar or catering work, cleaning or
delivery services.
To add to Greek worries, the EU’s Rapid
Intervention Border Team (RIBT) has been
dispatched by the EU, at the request of the
Greek government to try and stem the tide
of illegal immigrants using the Greek/Turk-
ish border zone as a means of entering the
EU. Upwards of 34,000 illegal immigrants
have so far entered Greece this year, up
from 9,000 in 2009. This is the first time
that the RIBT has been used.

4. EMEAEmploymentInsight
Manpower EMEA
Economic InsightIssue 6. October 2010
How does this all relate to you? Why not refer to the latest MEOS
Reports which are available from www.manpower.com/meos
Pay equality ruling for outsourced worker.
The European Court of Justice has backed a claim by a Dutch canteen worker whose salary halved when
his employer put the company’s catering out to tender in 2005, the Dutch daily newspaper Volkskrant
reports. Whilst workers who are switched to other employers in similar situations should have the same
pay and conditions, the employer had devised a way of avoiding the requirement. Instead of being
directly employed, the catering worker was employed via a third party hence the ability to reduce the
claimants pay. It is likely that this ruling will have major consequences for both the outsourcing and the
payroll sectors across the EU.
IBM study reveals Irish FDI job creation success.
A recent report into Foreign Direct Investment found that
in 2009, FDI generated more jobs per capita in Ireland than
any other country. Ireland benefited from 170 extra jobs per
100,000 inhabitants. The report revealed that Ireland
overtook Hungary in 2009 whilst Singapore was third. The
reports’ author accounted for Ireland’s success due to
“structural reasons”.
New Eurostar trains may hit the buffers.
Eurostar, which earlier this month placed an order for €600m
worth of new rolling stock, may see the tender process
blocked by court action issued by Alstom, the losing bidder.
The legal action is based around existing fire safety rules for
the tunnel, for which the Siemens winning bid does not
presently meet. In an interview with the FT.com Siemens
and Eurostar said the argument was “without foundation”
as the fire regulations were currently being amended. At the
same time Deutsche Bahn have been testing trains within
the Channel Tunnel in preparation for the launch of a service
between Frankfurt and London in 2013.
Rotterdam port development continues.
The Wall Street Journal this week reported that the $4.1bn
development of Rotterdam’s Maasvlakte2 deep water port
is on schedule to open phase one in 2013, thereby taking
advantage of the slow rebound in global shipping that has
taken place over the 12 months. Maasvlakte2 is the largest
land reclamation project in the world and aims to double
the freight handling capacity of Rotterdam. Once finished
the port will have also seen major investment to the tune of
$8.3bn by Maersk, DP World and General Motors amongst
others to develop further logistical hubs such as
warehouses and refineries.
VW profits grow but mixed future is forecast
Volkswagen, Europe’s biggest automaker, has announced
Q3 net profit leapt more than 10-fold whilst at the same time
warning of a slowdown in the final three months of the year.
VW and its nine brands that include Audi, Bentley, Seat and
Skoda, expect to surpass last year’s unit sales of 6.3m
vehicles and operating profit of €1.9bn. However looking
ahead, VW warned the sharp rebound would likely ease in
Q4 and early 2011.
Manpower issues upbeat Q3
trading statement.
Revenue increased by 18.7% from $4.18bn
in Q3 2009 to $4.97bn in Q3 2010. Despite
unfavourable foreign currency movements,
operating profit was £108.9m in Q3 2010
compared to an operating loss of $21.5m in
Q3 2009 (due to execptional items). Across
the EMEA region revenue growth was seen
in a number of countries including Italy, UK,
Germany, Belgium, the Netherlands and
across the Nordic region as a whole.
Extension of maternity leave.
The European Parliament has decided that
the minimum maternity leave within the EU
should be extended from 14 to 20 weeks.
The entitlement of paid paternity leave of
at least two weeks was also upheld. The
original EU commissions proposal was an
extension to 18 weeks, however the EU
Parliament voted to extend this further to
a total of 20 weeks. Within the legislation
is provision that at least 6 weeks in taken
after childbirth and that for the the first six
weeks of leave, workers should receive full
pay, falling to no less than sick pay for the
remaining 14 weeks. The draft legislation
is seeking to lay the foundation for
minimum rules across the EU, although
strong opposition is likely to be
encountered by national governments prior
to the draft legislation becoming law.
CEE Business Confidence grows.
An index published by Deloitte’s based on
business sentiment across Croatia, Czech
Republic, Hungary, Poland, Romania and
Slovakia shows that those surveyed have
an increasingly positive outlook with
regards to business prospects and
economic growth. Of the countries
surveyed, Slovakian business executives
proved to be most positive.