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
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%).
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%.
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%.
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.
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.
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.