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Eurociett publishes Agency Work Business Indicator for August 2014

German figures for the first half of 2014 had to be readjusted downwards, which negatively affects the European average, due to the size of the German market. This is partially offset by positive figures from Belgium, Denmark, Italy and the Netherlands. In most countries, May was a slow month, even when adjusting for actual working days, with growth declining to an average of 0.8%. In June, growth in several countries seems to improve again, especially in Belgium, the Netherlands and Italy. 

EVOLUTION OF AGENCY WORK SALES REVENUES IN EUROPE

Turnover development continues to show a cautious upward trend, now more or less in line with the development in hours worked. Belgium is showing the most positive development, now at 13.4% growth for the past two months after a dip in May. Other countries (Netherlands, Finland) experienced the same dip, but seem to recover as well. Norway saw a deterioration in Q2 2014 from 0% y-o-y growth in Q1 to -0.9%. 

HOURS WORKED’S CORRELATION WITH UNEMPLOYMENT AND GDP STATISTICS

For the past six months, the number of unemployed  people  in  Europe  decreased, albeit slowly. This coincides  with a positive growth in hours worked  by  agency  workers,  which  has  been  positive  since  October  2013,  whereas  the decline in unemployment started in  December 2013.    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  3-6  months.  In  other  words,  more  hours  worked  by  agency  workers  does  not  imply rising unemployment.

In  the  first  quarter  of  2014 both  GDP  growth  and  evolution  of  hours  worked  continued their upward trend that started  the  quarter  before.  EU28  y-o-y  GDP  growth  stood  at  1.5%  in  this  quarter,  while  the  number  of  hours  worked  by  agency workers grew by 3.3% in Q1.  

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 July 2014, the number of hours worked by temporary agency workers was -0.02% lower than a month earlier (seasonally adjusted data, corrected for calendar effects). An increase was observed in the blue collar segment by  0.30%. Activity in the white collar segment decreased by -0.45%. In comparison with July 2013, the activity in the temporary agency work industry grew by 11.95% (compared to 12.56% in June 2014) resulting from a rise in the  blue collar segment (hours worked: 13.36%) and in the white collar segment (10.22%).   

France 
In May 2014, temporary work turnover increased 1.5% (year over year). In the same time, number of hours  worked improved by 1%. In June 2014, number of temps at work has reduced by 2.8%. During the first half 2014, it  decreased by 3.4%. In the detail, trends in regions Haute Normandie, Champagne Ardennes and Nord pas de Calais  have remained above the average. Those regions, industry-oriented have grown between 2.8% and 7.8%.  

Netherlands 
In period 7 (week 25 – 28) the total amount of hours increased 6% and turnover grew 6% as well, in comparison  with the same period last year. This period had an equal amount of workable days compared to the same period  last year, so no correction was applied.  • The administrative sector increased 5% in hours and also turnover increased with 5%.   • Hours in the industrial sector increased 6% and turnover increased 6% as well.   • Ultimately, the amount of worked hours in the technical sector increased 9% compared to the same  period last year, turnover increased 8%.  

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 
Staffing for manufacturing and industry increased strongly during the year's first quarter, 33%.  Warehousing/logistics also increased by 15%. In addition, health care staffing increased by 20%. All compared with  the same period last year. This trend reveals three crucial areas where the staffing industry has become a central player for the Swedish economy: within industry, logistics and health care. 20,000 engineering workers a year are  now employed by staffing companies and contracted out to industry. Every day, 1,000 doctors from staffing companies work at district health centres and other care institutions. Warehousing and logistics units are being operated to an ever increasing extent by staffing companies – either in their entirety or specific parts. 

AGENCY WORK BUSINESS INDICATOR: AUGUST 2014

For the third quarter in succession, the industry as a whole is displaying positive growth, compared with the same  period last year. This year's first quarter has produced an increase of 9% compared with the same quarter last year. Quarterly turnover amounted to some 5 billion. In a regional perspective, Northern Sweden grew most  strongly at 19%. Northern Sweden is simultaneously the smallest region with 10% of turnover. Stockholm is still the largest region with one third of turnover, closely followed by the industrial Western Sweden with 27%. 

Staffing is by far the largest source of income at 89% of turnover. At the same time, outsourcing has grown steadily, now constituting 6% of turnover. Recruitment and outplacement each comprise 3%. With total staffing  increasing for the third quarter in succession, we can anticipate that sectors with white-collar workers and  university graduates will also be increasing their use of staffing agencies. 

UK 
Fastest rise in temp billings in 2014 so far. Agencies’ billings from the employment of temporary and contract staff continued to increase in July. The rate of growth was substantial, having quickened to a seven-month high. Panellists attributed higher revenues from short- term placements to rising business requirements at clients. The Midlands posted the strongest expansion of temp billings during the latest survey period, with growth there considerably faster than in the other regions.  

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