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Eurociett publishes Agency Work Business Indicator May 2014

EVOLUTION OF NUMBER OF HOURS WORKED BY AGENCY WORKERS IN EUROPE

After a decrease of the positive growth in January and February, the European weighted average has now reached another record high since October 2011 with 4.5% y-o-y growth in hours worked. All countries with the exception of Norway are now reporting positive growth. Highest growth can be seen in Switzerland (15.6%), Belgium (9.6%) and Italy (7.8%).

Turnover growth shows a mixed picture. While France and Belgium show increased growth of turnover, the Netherlands are more or less stable at 34% growth for the past 5 months. In Finland, the decline in turnover is expanding from -1.4% y-o-y to -2.2% y-o-y. Despite a significant decrease in hours worked, turnover in Norway remained stable in Q1 2014 (0% y-o-y growth). 

HOURS WORKED’S CORRELATION WITH UNEMPLOYMENT AND GDP STATISTICS

In the first quarter of 2014, EU unemployment levels fell by 2.8% (y-o-y).  This is another improvement from previous periods.  This  follows  steady  growth  in  hours  worked  by  agency  workers,  which  has  been  positive  since  October  2013,  whereas  a  decline  in  unemployment started in December.    The data continues to display an inverse relationship between unemployment levels in the EU and the amount of agency work being carried out. This implies that agency work is a leading indicator of employment. When agency work grows, employment levels will generally start improving within 3 to 6 months.  In  other  words,  more  hours  worked  by  agency  workers  does  not  imply  rising  unemployment.  

In the fourth quarter of 2013 both GDP growth and evolution of hours worked continued their upward trend that started the quarter before.  

These figures show a continuing pattern  between the year on year growth rate of  EU 28 GDP and evolution of the number  of  hours  worked  by  agency  workers  in  Europe, meaning that agency work is still  a coincidental economic indicator of GDP  growth.

EUROCIETT NATIONAL FEDERATION COMMENTS

Belgium 
In January 2014, the number of hours worked by temporary agency workers was 0.49% higher than a month earlier (seasonally adjusted data, corrected for calendar effects). An increase was observed in the blue collar segment by 1.78%, a decrease was observed in the white collar segment by -1.29%. In comparison with January 2013, the activity in the temporary agency work industry grew by 2.85% (compared to 0.42% in December 2013) resulting from a rise in the blue collar segment (hours worked: 7.58%) and a fall in the white collar segment (- 2.78%).   

France
In March, temporary work turnover, increased 2%. In the same time, hours worked improved by 1.5%. With 0.5% during the first quarter 2014, the level of employment had stabilized. In April, number of temps at work has reduced by 4% (in comparison with April 2013). The two last week’s trends had a negative impact on the tendancy.  This result should be interpreted carefully because of holidays. In the detail, Rh&ocircne Alpes and Bretagne, despite of the calendar effect, have stabilized.

Netherlands
In period 4 (week 13 – 16) the total amount of hours increased 4% and also turnover grew 4%, in comparison to the same period last year. This period had one workable day more compared to the same period last year, for this a correction was applied.  • The administrative sector increased 4% in hours and also turnover grew 4% in comparison to the same period in 2013.   • Hours in the industrial sector increased 4% and turnover increased 3% compared to the same period last year.   • Furthermore, the amount of worked hours in the technical sector increased 8% and turnover increased 6%.  

Norway
The Norwegian staffing industry experienced a fall of -4.8% in the number of hours worked by temporary workers during the first quarter of 2014 compared with the same period last year. Turnover was however at the same level as the year before and this shows that it has been a slightly price growth in the period. In line with a cooling of the Norwegian economy, declines were noted across most occupation categories. Sharp declines were reported in Warehouse/Logistics/Transport (-12.6%), IT (-10.6%), Manufacturing & Production (-9.7%), and Call Centres (- 9.7%). It is also worth noticing a 7, 2% decline in the largest occupation category of the Norwegian staffing industry, construction work. The penetration rate of the agency work industry stays stable on about 1% even though the market is declining. This shows that the development in the numbers of people working through the industry is proportional with the total Norwegian workforce. The agency work industry is closely linked to the total economic development.  A decline tells us that the Norwegian economy is slowing down and that there is a risk of unemployment growth.

Sweden
The staffing agencies continued to strengthen their role as a strategic partner for Swedish industry during the last quarter of 2013. The industry grew during the last quarter by 5.4% compared with the same period last year. A weak start to 2013 meant that during the year the industry fell by a total of 1%, turning over some SEK 20 billion.  (This refers to the industry's 35 largest companies.) Sales of staffing services to industry (24%) and the logistics sector (15%) grew substantially during the quarter. On a full year basis the increase was negligible. These two sectors account for 44% of turnover in the Swedish staffing market. Total sales during the year amounted to almost SEK 9 billion within these two sectors. Use of the staffing agencies’ services is moving more and more towards longer and more complex solutions, which, among other things, is resulting in increasing sales of outsourcing commissions. This area grew during the fourth quarter by 39% and on a full-year basis by 22%. Overall SEK 1 billion was invoiced during the year for outsourcing solutions. The fourth quarter displayed a continuing positive trend for the Health and Medical Care sector, with growth of 17% and 10% for the full year. Overall almost SEK 1.5 billion was invoiced within this occupational area. The sector is consolidating its important role in the Swedish labour market as a central HR supplier for a competitive industry, an efficient logistics structure and an available health care system.

UK
Growth of temp billings remains strong, despite easing.    Agencies’ billings from the employment of temporary/contract staff increased in April, as has been the case throughout the past year. The rate of growth was again marked, despite easing for the fourth month running to the slowest pace since June 2013. Temp billings growth was strongest in the Midlands, while the North posted the slowest rise. 

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