Monthly economic update looking at the EMEA jobs economy.

1. Manpower EMEA
Economic Insight
Issue 5. September 2010
EMEA Macro Economic Insight
EU recovery progressing within an uncertain global environment
A recent report by the EU has suggested that the economic recovery in the EU, while still fragile, is
progressing at a faster pace than previously envisaged. The September Interim Economic Report
noted “that real GDP growth for both the EU and Euro Area was on the upside in the second
quarter of 2010. This strong performance stemmed from an export-driven industrial rebound, in
line with the continued strong dynamics of global growth and trade in the first half of the year”
The report went on to state that “signs of a revival in domestic demand, including private con-
sumption, also became evident, particularly in Germany. While a moderation of EU GDP growth
in the second half of the year is still foreseen, some momentum from the second quarter should
feed-through to the following quarters, lifting the previously expected quarterly profile somewhat”.
Due to the sentiment shown and based on updated figures for the seven largest EU Member
States on growth and inflation, the EU Commission has revised upwards growth predictions. Real
GDP Growth is being projected at 1.8% in the EU and 1.7% within the Euro Area during 2010.
The full report can be read at http://tinyurl.com/37u25cj
Unemployment rate remains unchanged. Industrial new orders up by 2.5% in
The Euro Area seasonally-adjusted unemployment rate Euro area and up by 2.4% in EU27
was 10.0% in July 2010, unchanged compared with In June 2010 compared with May 2010,
June. This is the fifth consecutive month that the rate the Euro Area industrial new orders
has remained unchanged. It was 9.6% in July 2009. index rose by 2.5%. In May the index
The EU27 unemployment rate was 9.6% in July 2010, increased by 4.1%. In the EU27, new
unchanged since March 2010. It was 9.1% in July 2009. orders increased by 2.4% in June 2010
Eurostat estimates that just over 23m people in the after a rise of 4.0% in May. Excluding
EU27, of whom 15.8m were in the Euro Area, were ships, railway & aerospace equipment,
unemployed in July 2010. Compared with June, the for which changes tend to be more
number of persons unemployed decreased by 45,000 in volatile, industrial new orders grew by
the EU27 and by 8,000 in the Euro Area. 1.6% in the Euro Area and by 1.8% in
the EU27. In June 2010 compared with
Euro Area and EU27 GDP up by 1.0%. June 2009, industrial new orders have
GDP increased by 1.0% in both the Euro Area and the increased by 22.6% in the Euro Area
EU27 during the second quarter of 2010, compared and by 22.5% in the EU27. Total indus-
with the previous quarter, according to first estimates try excluding ships, railway & aerospace
released by Eurostat, In the first quarter of 2010, growth equipment rose by 22.5% and 23.7%
rates were +0.3% in both zones. Compared with the respectively.
second quarter of 2009, seasonally adjusted GDP
increased by 1.9% in both the Euro Area and the EU27, Industrial producer prices up by
after +0.8% and +0.7% respectively for the previous 0.2% in both euro area and EU27.
quarter. In July 2010 compared with June 2010,
the industrial producer price index rose
Industrial production stable. by 0.2% in both the Euro Area and the
In July 2010 compared with June 2010, seasonally ad- EU27. In June 2010 prices increased
justed industrial production remained stable in both the by 0.3% in both zones. In July 2010
Euro Area and the EU27. In June production fell slightly compared with July 2009, industrial
by 0.2% in the Euro Area, but rose by 0.1% in the EU27. producer prices gained 4.0% in the euro
In July 2010 compared with July 2009, industrial pro- area and 4.4% in the EU27.
duction has increased by 7.1% in the Euro Area and by
6.8% in the EU27. Industrial production rose in all the Euro area inflation estimated at 1.6%
Member States for which data are available, except Euro area annual inflation is expected
Greece (-8.5%). The highest increases were registered in to be 1.6% in August 2010 according
Estonia (+24.5%), Latvia (+17.9%) and Sweden (+15.3%) to latest estimate issued by Eurostat. It
and the lowest in Spain (+0.5%), Denmark (+0.9%) and was 1.7% in July. Inflation in the UK is
Portugal (+1.0%). now estimated to be 3.1%, well ahead
of Government target of 2.0%.

2. Manpower EMEA
Economic Insight
Issue 5. September 2010
EMEA Macro Economic Insight
Hourly labour costs rose by 1.6% in both euro area and EU27
Hourly labour costs in the Euro Area rose by 1.6% in the year up to the second quarter of 2010,
compared with 1.9% for the previous quarter. This is the lowest increase registered since the start of
the series in 2000. In the EU27, the annual rise was 1.6% up to the second quarter of 2010, compared
with 2.1% for the previous quarter.
The two main components of labour costs are wages & salaries and non-wage costs. In the Euro Area,
wages & salaries per hour worked grew by 1.5% in the year up to the second quarter of 2010, and the
non-wage component by 2.0%, compared with 1.8% and 2.2% respectively for the first quarter of 2010.
In the EU27, hourly wages & salaries rose by 1.5% and the non-wage component by 1.7% in the year
up to the second quarter of 2010, compared with 2.2% and 1.7% respectively for the previous quarter.
The breakdown by economic activity shows that in the Euro Area hourly labour costs rose by 1.1% in
industry, 1.7% in construction and 1.9% in services in the year up to the second quarter of 2010. In the
EU27, labour costs per hour grew by 1.1% in both industry and construction, and 1.8% in services.
New rights for new mothers Retail trade grew by 0.1% in both
The European Parliament's Equality Committee has adopted Euro Area and EU27 in July.
an amendment to the EU Pregnant Workers Directive. The In July 2010, compared with June
Directive is seeking to raise the minimum maternity leave 2010, the volume of retail trade in-
entitlement to 20 weeks. The proposal may also remove the creased by 0.1% in both the Euro Area
mandatory leave period prior to the birth of the child. Other and the EU27. In June retail trade rose
changes include the right for women returnees to take two- by 0.2% and 0.3% respectively. In July
hour breaks from work to breastfeed their child and for new 2010, compared with July 2009, the
fathers to benefit from a new right to take up to two weeks retail sales index rose by 1.1% in the
paternity leave. The proposal will be debated at a full ses- Euro Area and by 1.0% in the EU27. In
sion of the European Parliament in October. July 2010, compared with June 2010,
“Food, drinks and tobacco” grew by
Foreign nationals within the EU 0.3% in the euro area and by 0.1% in
A new report by the EU has highlighted the differences in the the EU27. The non food sector de-
distribution of foreign nationals. On average the proportion creased by 0.1% in the euro area, but
of foreigners living in EU member states currently averages rose by 0.2% in the EU27.
6.4%. There are however wide variations in this. In Luxem-
bourg the proportion is 44% whilst in Poland, Romania and Turkey leads economic growth
Bulgaria the proportion is less than 1%. In total the EU Turkey’s economic growth is likely to
estimates that there are nearly 40m foreign nationals living in be among the strongest of OECD
EU countries, of which 12m are nationals of other EU countries in 2010, supported by
member states. financial stability, international
investor confidence and a dynamic
Ukraine still looking West business sector. The news follows a
Ukrainian President Viktor Yanukovych’ has held talks with recent OECD country survey which
EU leaders in Brussels focusing on the Ukrainian ambition of highlighted the need to move forward
developing a free trade agreement together with a visa-free with important regulatory changes.
travel. Both issues will again be highlighted in a future EU- According to the OECD, excessive
Ukraine summit to be held in Brussels in November. labour market regulation, which
provides incentives for informal
President Yanukovych is seeking to “enable a free-trade arrangements, which in turn hindes
agreement allowing for a gradual integration of the Ukrainian growth, will be reduced when a new
economy into the European Union.” A formal application draft law introducing new fiscal rules
for EU membership would be the next logical step once the comes into effect. On a separate note
Ukraine signs an Association Agreement with the EU, how- Israel has become the 33rd nation to
ever the Ukraine enjoys less than full backing for both full join the OECD.
entry to the EU and also visa-free travel.
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3. Manpower EMEA
Economic Insight
Issue 5. September 2010
SPAIN ROMANIA
EMEA Country Insight
The Spanish Government has pushed ahead with The Romanian Labour ministry has announced
a radical overhaul of the protection offered to that the national minimum wage will be
permanent employees. Due to high cost of increased in 2011 by up to 16.6% from its
termination payments for permanent employees present level of €142 euros per month (600
nearly 25% of the Spanish workforce is on a RON). However, local trade unions are press-
temporary contract. A recent IMF report stated ing for an increase in the minimum wage of at
that Spain needed to move towards rebalancing least 25% to €178 (750 RON) a month.
this employment trend by moving the temporary
labour market to no more than 11.3% of those UNITED KINGDOM
employed. In June 2010 average weekly earnings in the
private sector were £420.00 (€513). This was
RUSSIA 1.2% higher than in June 2009. Over the last
In line with much of Europe, the Russian year the biggest increases in weekly earnings
Government is currently drawing up proposals were in manufacturing (+3.5%) and the public
for raising the state retirement age. The plan is to sector (+2.9%).
be presented in the autumn and will look to have
a phased increase in the retirement age, bringing NORWAY
the minimum age of retirement up to 60 years for Growth in the Norwegian job market is reach-
women and 65 for men. ing 2007 levels in some sectors. During the
second quarter of 2010 the number of unfilled
GREECE vacancies rose by 64% in tourism, 47% in oil
According to a recent report in the Wall Street gas and offshore operations and 46% in IT
Journal tax collections in Greece are running and telecoms. However there was also some
9.5% above levels of last year even though eco- contraction in the banking and finance (-9%)
nomic estimates show that the shadow economy and construction (-3%) sectors.
equates to around 30% of Greek GDP.
CZECH REPUBLIC
POLAND Companies with up to 250 employees can now
Dispute the prospect of growing unrest, trade claim grants from the Ministry of Trade and
union membership in Poland has fallen from 30% Industry for up to 50% of the fees charged by
of the national workforce in the early 1990s to external consultants. The programme organ-
just 15% today. Of the 2.5m trade union mem- ised by Czech Invest provides funding for up
bers they principally belong to either the OPZZ or to €20,000 in order to achieve improvements in
NSZZ Solidarnosc trade unions. existing products and services or in the
development of new business processes.
SLOVAKIA
The Slovak Ministry of Labour, Social Affairs GERMANY
and the Family have proposed that the national Business confidence in Germany in July
minimum wage should rise by €10 euros to reached its highest point in three years after a
€317.70pm on January 1st 2011. The recom- 2.2% rise in GDP between Q1 and Q2.
mendation will now be passed onto the tripartite
council to agree the change, the deadline for Much of the success is based on strong export
their decision is October 20th 2010. Plans are markets and labour market initiatives, includ-
also in place to raise the ceiling for social ing major improvements in labour flexibility
security contributions. If the proposal goes and the short-time working scheme. Although
ahead contributions will rise by about €158 per the scheme has been a costly investment by
month for employees earning 5x average pay. the state it has helped industry to retain its
core workers. Trade unions have also focused
BELGIUM on job security rather than preserving real
The hourly wages of adult male workers in Bel- income levels, however the unions are now
gium rose by an average of 0.84% over the year starting to switch their attention to wage
to July 2010. Between May and July 2010 wages demands, which could cause future problems.
increased by 0.4%.

4. Manpower EMEA
Economic Insight
Issue 5. September 2010
Outlook Mixed for Europe in Q4 Manpower Employment Outlook Survey (MEOS)
EMEA Employment Insight
Similar to the third quarter, fourth-quarter hiring expectations remain mixed in the 18 countries surveyed
in the EMEA region MEOS Report. Employers are reporting positive Net Employment Outlooks in 10
countries, but those in 11 expect the pace of hiring to soften from three months ago. However, the
year-over-year comparison is more positive with improved Outlooks reported in 15 of 18 countries.
Hiring activity in the region is expected to be strongest in Switzerland, Norway and Poland and
weakest in Greece and Italy. Jeffrey A. Joerres, Chairman and CEO of Manpower Inc commented that
“Employers in many markets continue to struggle with inconsistent demand for their products and
services making it difficult to anticipate staff needs. As a result, a flexible workforce strategy will be
critical during this point of the recovery cycle.” Joerres went on to say “European labor markets have
yet to gain real traction due in part to the uncertainty in Greece and Italy. But we are seeing notable
improvements across the region in the Finance and Business Services sector, where year-over-year
forecasts improve in 15 countries, most notably in Switzerland, Germany and Norway. The German
labor market continues to be resilient; however lack of talent, especially engineers, healthcare
professionals and sales staff, is becoming a real issue for employers in many sectors.”
General Motors-Opel seeks union agreements Greece and China joins forces
General Motors-Opel has told the Wall Street Journal that Cosco, the Chinese shipping giant,
it expects to have a European wide agreement with trade which last year signed a 35-year lease
unions in place by the end of September. The new with Greece to expand the two main
agreement includes the loss of 8,000 jobs, closure of its container terminals at the main Greek
factory in Antwerp, Belgium and a 20% reduction in port of Piraeus for €3.4bn has signaled
european plant capacity. On the plus side, GM has agreed the start of a major inward investment
to invest upwards of €11bn to upgrade facilities and extend programme. The strategic location of
its range of models. Failure to do so will mean workers can the Greek port facilities make it an ideal
seek compensation amounting to €265m p.a. until 2014. gateway for China into the Balkans
and Europe.
HP buys ArcSight security software firm
US computer giant HP has continued its recent buying Since the original Cosco deal a further
spree with the $1.5bn acquisition of ArcSight, the 14 agreements have been reached,
security software firm. ArcSight provides software that which amount to the biggest inward
enables companies to monitor their data flows whilst being investment agreement ever reached
able to identify hackers. The announcement follows the between Europe and China. Some of the
purchase of data storage company 3Par in August for projects include the building of super-
$2.1bn after a bitter bidding war with rival computer sized bulk shipping, redevelopment of
manufacturer Dell. The buyout is expected to be completed the port of Pireaus to improve road and
by the end of the year. rail transportation links as well as the
sharing of technological and
Public Sector strike action in UK likely telecommunication innovations.
The main public sector trade union groups in the U.K. have
called for joint industrial action following central Govern- The agreements reached are a signal that
ment announcements on budget cuts, which are expected Greece is willing to seek major Foreign
to lead to upto 600,000 public sector job losses over the Direct Investment from sovereign wealth
next 5 years (8% of total public sector workforce). funds in order to rectify the current
The Trade Union Council has backed a motion calling for a €100bn plus deficit. It is not known at
“broad solidarity alliance of unions” The TUC leader stated present how many jobs will be created
that “Where members, faced with attacks on jobs, pay or but Greek trade unions are worried at
pensions take a democratic decision for industrial action, the prospect of chinese labour being
they will have the support of unions and the TUC stands used for some of the initial infrastructure
ready to co-ordinate that.” development projects.
How does this all relate to you? Why not refer to the latest MEOS
Reports which are available from www.manpower.com/meos