1.December 2012With special focus on gender pay gap, the latest trends in poverty and social exclusion and recent findings from the 2012 European Quality of Life SurveyDecember 2012 I 1

2. Social EuropeEU Employment and Social Situation I Quarterly ReviewThis Quarterly Review provides in-depth analysis of recent labour market developments. It is prepared by the EmploymentAnalysis and Social Analysis Units in DG EMPL. A wide combination of information sources have been used to produce thisreport, including Eurostat statistics (see [codes] mentioned under the charts, to be used with the Eurostat data searchengine: http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database), reports and survey data from theCommissions Directorate-General for Economic and Financial Affairs, national and sectoral statistics and articles fromrespected press sources. The Review has also benefited from contributions from public and private employment services.The sections on restructuring trends, based on ERM data, were prepared by the European Foundation for the Improvementof Living and Working Conditions (Eurofound).Employment and social analysis portal: http://ec.europa.eu/social/main.jsp?catId=113&langId=enContact: empl-analysis@ec.europa.euNeither the European Commission nor any person acting on behalf of the Commission may be held responsible for the usethat may be made of the information contained in this publication.Europe Direct is a service to help you find answers to your questions about the European UnionFreephone number (*): 00 800 6 7 8 9 10 11(*)Certain mobile telephone operators do not allow access to 00 800 numbers or these calls may be billed.More information on the European Union is available on the Internet (http://europa.eu).Cataloguing data as well as an abstract can be found at the end of this publication.Luxembourg: Publications Office of the European Union, 2013ISBN 978-92-79-28115-0ISSN 1977-8317doi: 10.2767/93534 European Union, 2013Reproduction is authorised provided the source is acknowledged. December 2012 I 2 3. Social EuropeEU Employment and Social Situation I Quarterly ReviewTable of ContentsIntroduction ................................................................................................... 8Macroeconomic and employment context and outlook ................................... 8Context ......................................................................................................... 8Outlook ........................................................................................................10Recent labour market and social trends ....................................................... 12Employment ..................................................................................................12Unemployment ..............................................................................................13Long-term unemployment ............................................................................15Inactivity and discouragement .........................................................................17Youth ...........................................................................................................17Other selected groups ....................................................................................21Financial situation of households ......................................................................23Box 1: Situation in Portugal ............................................................................26Underlying labour market and social developments ..................................... 27Employment patterns .....................................................................................27Vacancies: jobs starters and leavers ................................................................28Vacancies, labour shortages and hiring activity ..................................................29Productivity, labour costs and hours worked ......................................................31> Special Focus: the gender pay gap in the wake of the crisis .............................33Social inclusion trends ....................................................................................39> Special Focus: Latest trends in poverty and exclusion - six million more Europeansat risk since 2008 ..........................................................................................39> Special Focus: The results of the latest European Quality of Life Survey ............44Sectoral trends ..............................................................................................50> Sectoral Focus: Health and Social Services in the EU Recent Developments ....53Impact of restructuring on employment ............................................................58Annex 1: Selected statistics .......................................................................... 63Annex 2: Selected research .......................................................................... 73December 2012 I3 4. Social EuropeEU Employment and Social Situation I Quarterly ReviewDecember 2012 I 4 5. Social EuropeEU Employment and Social Situation I Quarterly Review Executive summaryThe EU Employment and Social Situation Quarterly Review provides an overview ofdevelopments in the European labour market and the social situation in the EU, based on thelatest available data. Against the backdrop of persistent difficulties on the labour markets,marked by ever higher unemployment at EU level, and rising divergence across MemberStates, the number of people at risk of poverty or social exclusion in the EU now accountsfor nearly one-fourth of the EU population.In the third quarter of 2012, output of goods and services, driven by exports, public and privateconsumption, was not high enough to prevent the EU economy from contracting compared withthe third quarter of last year. In the EU, GDP shrank by about 0.5% over the year. Theeconomic activity in more than half of the Member States continued to fall, with a significantslow-down in Romania, the Netherlands, Finland, Slovenia and the Czech Republic. In thecountries registering growth, the rate of growth remained more or less the same, with the Balticcountries growing by more than 3.3 %. Among larger Member States, the economy continued togrow in Germany, France and Poland, whereas it shrank further in Italy, Spain and the UnitedKingdom.Dragged down by falls in the levels of temporary and full-time employment, anddespite some positive developments in part-time jobs, overall employment has continued todecline. Employment at EU level remains stubbornly weak. It has been trending down againsince mid-2011. Over the year to the third quarter 2012, employment fell more steeply in theeuro area (-0.7 %) than in the EU as a whole (-0.5 %, down 1.1 million). In the third quarter ofthis year, it fell again by 0.2 %. The steepest declines since last year were recorded in Greece(-8.9 %), Lithuania (-5.5 %), Spain and Portugal (both -4.1 %), hardly compensated by rises inLatvia (+3.4 %), Luxembourg, the UK, Malta and Estonia (+2.1 to +1.2 %). Most MemberStates 19 out of the 24 for which data is available - recorded an employment level belowthat of four years ago (EU: -2.4 %).In this bleak context, the EU job-finding rate has declined further, from an already lowlevel, while the risk of becoming unemployed has increased. The job-finding rate decreased to12.1 % in the second quarter of 2012, from 12.5 % in the previous quarter, reaching a recordlow. Four years ago it stood at about 20 %. In addition, the risk for employed people to losetheir job also increased slightly in the second quarter, with the job-loss rate at 3.5 %.The number of unemployed in the EU has continued to rise over recent months, increasing by3.5 million (or 15.7 %) since March 2011 and reaching a new high of more than 26 million(or 10.7 % of the active population), by November 2012. Unemployment trends remain lessfavourable in the euro area than in the EU as a whole. Moreover, divergence between EUMember States in terms of unemployment rates has continued to widen, with an all-timerecord gap of 22.1 percentage points (pps) now being observed between the Member State withthe lowest rate of unemployment (Austria, 4.5 %) and that with the highest (Spain, 26.6 %).Young people remain the first victims of the lack of jobs, with the youth unemployment ratereaching a new peak in November 2012, at 23.7 %, up by 1.5 pps over the year, a riseessentially driven by a dramatic decline for young people in temporary and full-timejobs. Most Member States have to cope with rising youth unemployment. As a consequence theEU employment rate for youth went down by 0.7 pp to 32.8 % over the year to the secondquarter of 2012. Growing long-term unemployment and non-productive inactivity foryouth pose serious risks for the young generation, which materialise particularly in the risingnumber of young people who are neither in employment nor in education and training (NEET),and which now account for nearly 13 % of the population aged 15 to 24.On the positive side, overall inactivity rates kept falling in the EU over the year to the secondquarter of 2012, in particular in those Member States with the highest rates. The decline ininactivity was mainly driven by continued rises in female participation, althoughinactivity also started to decline among men. Nevertheless, there are signs of increasingdiscouragement among the remaining population of inactive people, as employment prospectsdeteriorate. EU long-term unemployment continues its by now three-year upward trend. By thesecond quarter of 2012, the number of people who had been unemployed for more than a year December 2012 I 5 6. Social EuropeEU Employment and Social Situation I Quarterly Reviewhad increased by 14.3 % (or 1.35 million people) compared to the same quarter of 2011 toreach a total of close to 11 million and accounting for 4.6 % of the active population.In the second quarter of 2012, while the inactivity rate of older working age people (55-64)declined further compared to a year ago, while their unemployment rate increased onlymoderately. They nevertheless remain particularly vulnerable to long-term unemploymentand still exhibit relatively low levels of labour market participation. In that respect, theemployment gap between nationals and non-EU nationals increased further over theyear to the second quarter of 2012.Owing to inter alia- the very difficult labour market situation, the number of Europeans atrisk of poverty or social exclusion increased by six million between 2008 and 2011,affecting now 24.2 % of the population, as reported by the latest EU-SILC data (see SpecialFocus at page 39). Large cross-country disparities are emerging, due to differentials inhousehold income growth. The most affected groups are working-age adults. Theirsituation has deteriorated due to increasing joblessness and in-work poverty. As a consequence,the situation of children has also deteriorated in a majority of Member States.The share of the EU population reporting their households are experiencing financialdistress has risen worryingly sharply in recent months, reaching yet another historical high.Sharp rises in financial distress have now permeated across all income groups, with middle-income households now experiencing the same marked rises that had been observed earlier in2012 for the bottom and top quartiles. Over the last year the increase in financial distress hasbeen particularly sharp in Italy, while Bulgaria, Greece, Ireland, Portugal and Spain alsorecorded marked rises.Likewise, the third European Quality of Life Survey makes evident a decrease in bothobjective living standards and in perceived quality of life between 2007 and2011/2012, with the effects of the crisis particularly visible for the lowest income quartile.There has been a general and marked decline in optimism, trust in government andemployment security, accompanied by decreases in happiness and life satisfaction in a fewMember States, especially those experiencing the greatest economic difficulties. The financialsituation of households, measured by the ability to make ends meet and perceived changes overthe past year, together with material deprivation, has worsened visibly across the EU (seeSpecial Focus at page 44).Labour productivity growth contracted further in several Member States, while growth innominal compensation per employee remained subdued so that on balance nominal unit labourcost growth remained fairly moderate in most Member States nevertheless, in Ireland thedownward trend in nominal unit labour cost growth since the onset of the crisis came to an end.The labour income share continued to decrease at a notable rate in several MemberStates, especially in Spain and Slovakia.The unadjusted gender pay gap in the EU declined between 2008 and 2010 on average,from 17.3 % to 16.2 %. This decline appears to be a side effect of the crisis on the compositionof the workforce, with male-dominated sectors losing ground relatively more than female-dominated ones and more men accepting part-time and temporary jobs. There has also been alarger increase in higher educated female employment compared to males between 2008 and2010. While the improvement in the gender pay gap is thus largely driven by compositioneffects and therefore not necessarily long-term, the faster increase in womens averageeducational attainment may contribute to a more permanent decline in the gender pay gap,as long as women are channelled towards the high-earning, skilled occupations with the highestfuture labour demand (see Special Focus at page 33).Confidence stands at a very low level. As a result, the economic outlook is bleak, withunemployment remaining at a very high level and no significant improvement beingforecast before 2014. Recently, the job vacancy rate and the labour shortage indicator bothdeclined, reflecting the weak economic situation and outlook. Employment expectations inindustry have stabilised over the past months in the EU, although pessimism prevails in themajority of Member States. Over the four years to the third quarter of 2012, more than 2 % ofjobs disappeared in the EU across all sectors, although the intensity of job losses variedbetween 9.3 % in industry and 15.6 % in construction on the one hand, and 1.8 % in the tradesector on the other hand.December 2012 I 6 7. Social Europe EU Employment and Social Situation I Quarterly ReviewAccording to the European Restructuring Monitor, announced restructuring-related joblosses continued to outnumber announced job gains, by 148 000 against 46 000. Most ofthe recent job loss announcements are related to Greece. Manufacturing industry still featuresthe highest number of both announced job gains and losses.This edition of the Quarterly Review takes a closer look at the labour market and social situationin Portugal. In addition to the regular analysis of sectoral trends, a focus on the health andsocial services sector in the EU is also presented (see page 53), supplemented by a more in-depth analysis, attached to the Review (see "Special Supplement"). The health and social worksector has been an important driver of employment growth in the European economy over thelast decade, in particular for women and older workers, and has helped to stabilise employmentgrowth in the crisis. Not only do SSGI help people to live in dignity and enjoy their fundamentalrights, but also to fulfil their potential and to take part in society.Table 1: Latest labour market trends 2011q32011q42012q1 2012q2 2012q3Real GDP(% change on previous quarter, SA) 0.2-0.3-0.1 -0.20.1(% change on previous year, SA)1.4 0.8 0.1 -0.3 -0.4Employment growth(% change on previous quarter, SA) -0.1 -0.1-0.20.1 -0.2(% change on previous year, SA) 0.20.1-0.3 -0.3 -0.5Employment rate(% of w orking age population, NSA)64.6 64.363.6 64.3 :Job vacancy rate(% of vacant and occupied posts, NSA)1.5 1.51.51.5 1.4Labour productivity(% change on previous year, SA)0.4-0.20.1-0.3 :Labour cost(% change on previous year, SA)2.6 2.81.52.5 2.4Long-term unemployment rate(% Labour force, NSA)4.1 4.34.54.6: 2012 Jul 2012 Aug 2012 Sep 2012 Oct 2012 NovUnemployment rate (SA)Total (% of labour force)10.5 10.510.6 10.7 10.7Men10.4 10.510.6 10.7 10.8Women10.5 10.610.6 10.7 10.7Youth (% of labour force aged 15-24) 22.8 23.023.2 23.5 23.7Source: Eurostat, DG EMPL own calculations.Note: SA = seasonally adjusted; NSA = non-seasonally adjusted.December 2012 I 7 8. Introduction Macroeconomic andThe unemployment rate is still at its highestemployment context andin the EU1, at 10.7 % in November 2012(11.8 % in the euro area), and the situation outlookfor young people remains very worrying Context(unemployment rate at 23.7 % in the EU),while the outlook for the coming months is The EU economy is shrinkingpoor. These developments have had aconsiderable impact on the living conditions In the EU, real GDP shrank by about 0.5 %of Europeans.between the third quarter of 2011 and the third quarter of 2012 (see Chart 1). DuringThis Quarterly Review provides an in-depth this period, demand was compressed by aoverview of developments in the European very low level of confidence and thelabour market and the social situation in thenegative effects of fiscal consolidation.EU, based on the latest available data.2 ItQuarterly growth during the third quartersummarises short-term trends in GDP andwas marginally positive, at 0.1 %.employment growth,changes inemployment by sector and category of The divergent movements in the US and EUemployment, unemployment, long-termunemployment rates over the last twelveunemployment and inactivity, with a focusmonths (respectively -1 pps and +0.8 pp,on vulnerable groups, namely youth,see Chart 2) reflect mainly the growthmigrants and low-skilled. The analysis alsodifferential (realGDP changedby,covers the latest trends in working hours, respectively, roughly +2.5 % and -0.5 %productivity and labour costs, developmentsyear-on-year), as well as the falling labourin employment patterns and vacancies, theparticipation rate in the US.impact of restructuring, and recent changesChart 1: Real GDP volumes in the EU and thein economic sentiment and employment USexpectations. It explores in detail the latestsocial inclusion trends, based on a wealth ofindicators.Additionally, more specific topics arereported on within the Special Focussections concerning: gender pay gap in thewake of the crisis, the latest trends inpoverty and social exclusion and recentfindings from the latest European Quality ofLife Survey. Recent developments inPortugal,3 as well as in the health and socialservices in the EU are also focused on. Thelatter analysis is also further developed in aSpecial Supplement. Finally, the twoannexes present the latest labour marketstatistics and a selection of recentlypublished and relevant research material. Source: Eurostat, National accounts, seasonally adjusted data [namq_gdp_k].1"EU" refers to the aggregate value for the EU-27(27 Member States). Other aggregates are Quarterly growth supported by exports,clearly identified in the text, e.g. EU-15, euro private consumption and servicesarea or EA-17, etc.2This report is based on data collected up untilThe third-quarter growth in the EU was the20 December 2012. The only exception is theresult of increased exports and domesticsection on monthly unemployment, updated on 8 demand, with rising private consumptionJanuary 2013.3 Portugal is the only "programme country", and stagnating government expenditures.having received financial support from the EU, The overall growth picture benefited fromECB and IMF in recent years, which had not beenthe growth of trade, transport and foodcovered in any of the previous editions of theQuarterly Review in 2012. December 2012 I 8 9. Social Europe EU Employment and Social Situation I Quarterly Reviewservices, professional and support services,Chart 3: Third-quarter real GDP in EUand art, while other services stagnated.Member StatesChart 2: Unemployment rates in the EU andthe USSource: Eurostat, National accounts, seasonallyadjusted data, [namq_gdp_k].Note: IE, EL, LU and MT data not available.Over the year up to 2012 q3, the economiesin more than half of the Member StatesSource: Eurostat, National accounts, seasonallycontinued to contract, while the rate ofadjusted data [une_rt_m].growth remained more or less the same inthe growing ones (see Chart 4). There wasThe decline affected agriculture, industrya significant slow-down in Romania, theand construction. The construction sector Netherlands, Finland, Slovenia and thecontracted for the fifth consecutive quarterCzech Republic, with Romanias economy(-1.2 % from -1.3 % in the second quarter), switching from growth to contraction. Onwhile total industrial production and the positive side, the Baltic countriesagriculture output decreased for the second continued to grow by more than 3.3 %, withquarter running.Estonia increasing its annual growth rate by0.6 pp (to 3.7 %) and Latvia by 0.4 pp (toFurther falls in Member States GDP and5.2 %). Among the six largest countries,employment and continued divergenceGermany and France continued to grow atAmong the countries with negative growthmore or less the same rate, whereasduring the third quarter, the economy ofPolands growth slowed in comparison toSpain contracted for the fourth consecutive the y-o-y changes in the previous quarter.quarter. Italy and Cyprus saw their The situation deteriorated even further ineconomies shrink for the fifth quarterthe other three big Member States, Italy,running, while Portugals economy has beenSpain and the United Kingdom.contracting for almost two years, since theAs in the case of GDP, employment growthlast quarter of 2010. The growth ratediverged markedly among Member Statesturned negative in the Netherlands and(see Chart 5 and employment analysisRomania in the third quarter. Third-quarterbelow).economic activity did increase, though,mainly in the countries which were alreadygrowing in the second quarter of 2012.Growth rates accelerated in the Balticcountries and in Poland. The economies ofDenmark, France and the United Kingdomstarted to grow in the three months up toSeptember, while Belgiums activity stoppeddeclining (see Chart 3).December 2012 I 9 10. Social Europe EU Employment and Social Situation I Quarterly ReviewChart 4: Real GDP growth in EU MemberStates, yearly changes in the second andOutlookthird quarter of 2012Overall economic sentiment at very lowlevelDuring autumn, the Commissions economicsentiment indicator fell to its lowest level inthree years, with broad-based drops in allsectors. The sentiment indicator posted asignificant increase from this very low levelin November, but it evidently remains to beseen whether this would be a new turningpoint, or just a blip.This development was mirrored in the euro-area Purchasing Managers Index (PMI)composite output index, which also rosesignificantly in November, from a 40-monthlow in October.Growth forecasts remain bleakSource: Eurostat, National accounts, seasonally In the Commissions autumn forecast, GDPadjusted data, [namq_gdp_k].is set to contract by 0.3 % in the EU andNote: IE, MT and LU data not available. 0.4 % in the euro area in 2012. GDP growthfor, respectively, 2013 and 2014 isChart 5: Employment growth in EU Memberprojected at 0.4 % and 1.6 % in the EU andStates, yearly changes in the second andthird quarter of 20120.1 % and 1.4 % in the euro area.Unemployment is expected to remain veryhigh, at about 11 % in the euro area andabout 10 % in the EU in 2013 and 2014.The stability of unemployment when GDPgrows by 10.5 % (in 2014) is in line withestimations of Okuns law. In 2014, fairlysignificant increases in unemployment areforeseen in Italy, Cyprus and Slovenia,while growth would be insufficient to makea dent in unemployment in most continentaleuro-area Member States (and Finland andDenmark).Recent forecasts by the IMF, the OECD andthe ECB confirmed the bleak outlook. TheOECD forecast is more negative than theCommission one on some of the vulnerableSource: Eurostat, National accounts, non- euro-areaMemberStates(Greece,seasonally adjusted data, [namq_nace10_e].Portugal, SpainandSlovenia).Note: EL, LT not shown, being a negative outlier; Unemployment in Greece and Spain wouldMT data not available for 2012 q3.reach 27 % in 2014 in this forecast.Employment expectations in industry havestabilised over the past months in the EU,although pessimism remains in the majorityof Member States.Employment prospects in industry in the EUhave stopped decreasing and have beenstabilising since the end of summer 2012 ata level close to the long-term average at EUaggregate level (see Chart 6). In November2012, managers in the industrial sectorremained ratherpessimistic aboutemployment prospects in 16 Member December 2012 I 10 11. Social Europe EU Employment and Social Situation I Quarterly ReviewStates, and particularly in Cyprus, Greecethe unemployment outlook in 23 Memberand Sweden. On the other hand, industrial States, and especially in the Netherlands,managers expect an increase inBelgium, Finland, Spain, Portugal andemployment in Romania, Lithuania and theGreece. Only four countries (Germany,United Kingdom. Lithuania, Estonia and Latvia) remainedfairly optimistic about unemployment trendsEmployment prospects for services are stillin the coming months.poor and are particularly depressed inconstruction sectorsChart 7: Unemployment rate and consumersSince late summer 2012, there has been aunemployment expectations(next12slightincreasein theemploymentmonths) for the EUexpectations of the services sector atEuropean level. Nevertheless, employmentprospects in services remain poor, as theyare still below their long-term average inthe EU and in most Member States. InNovember 2012 managers in the sectorexpected employment to decrease in 16Member States, and in Greece, Slovenia,Finland and the Netherlands in particular.Chart 6: EU employment expectations (next3 months) inindustry and intheconstruction and services sectors (centredaround long-term average)Source: Eurostat, ECFIN. Data seasonallyadjusted.Source: ECFIN, DG EMPL calculation.Sentimentconcerning employmentinconstruction at European aggregate levelhas remained persistently depressed overrecent years (see Chart 6). In November2012, managers in the construction sectorexpected employment to fall in 22 MemberStates, and especially in Spain, Portugal,the Netherlands and Greece. In only threecountries (Germany, Luxembourg andAustria) do managers in the constructionindustry have a rather optimistic view ontheir employment.European consumers expect unemploymentto increase in the coming months in mostMember StatesFears of increasing unemployment in thecomingmonthsworsenedagain inNovember 2012 (see Chart 7). In November2012, consumers were pessimistic about December 2012 I 11 12. Social Europe EU Employment and Social Situation I Quarterly Reviewa contraction and remained stable in four4Recent labour marketThe largest falls in 2012q3 were observed inand social trends Poland (-2.4 %)5, Spain(-0.8 %), Cyprus (-0.6 %) and SloveniaEmployment(-0.6 %). In contrast, employment wasexpanding in the Austria and Sweden, withEuropean employment remains weak andgrowth in 2012q3 of 0.2 %, in the Unitedhas been trending downwards since mid-Kingdom (+0.3 %) and in Latvia (+1.6 %).2011; in the third quarter of this year it fell Yet despite this acceleration, employmentagain by 0.2 %However, despite the marked employmentThe number of people in employment in the recovery in Latvia, it remains 23 % belowEU has remained sluggish since mid-2011 the 2008 level.and in 2012q3 it shrank by 0.2 % (orEmploymentis following amarked530 000 persons), wiping out the modest downward trend in some Member States,growth of the previous quarter (+0.1 % in preventing aggregate European2012q2).Since mid-2011,European employment from picking upemployment has been trending down and,compared to the most recent peak in Chart 9: Employment change in 2012q32011q2, it has fallen by 0.6 % or 1.3 million (yearly change, 000 persons) and quarterlypersons (see Chart 8).change (%, q-o-q) in the EU-27 MemberStatesChart 8: Employment and unemployment inthe EU-27 (000 persons), 2005-2012Source:Eurostat, NationalaccountsSource:Eurostat, National accounts[namq_aux_pem]; data seasonally adjusted for[namq_aux_pem] and EU-LFS [une_nb_m]; dataq-o-q; 2012q3 q-o-q change not available for EL,seasonally adjusted.IE, LU, MT and RO.The employment contraction in the third Over the year to 2012q3, employment grewquarter was more pronounced in the euro in nine Member States, fell in twelve andarearemainedstablein two6. Europeanemployment has been marked by a severeIn the third quarter, employment fell moredrop in some Member States, in particularsteeply in the euro area than in the EU as aGreece (-395 000 persons, -8.9 %), Spainwhole.Overthe year to 2012q3, (-785 000, -4.1 %), Portugal (-200 000employment fell in the euro area by aroundpersons, -4.1 %), Cyprus (-12 000, -3.2 %)1.1 million (- 0.7 %), more steeply than inthe EU (- 0.5 %). 4Data available for 22 countries; employmentEmployment fell in most Member States inchange (q-o-q) in 2012q3 is not available for IE,EL, LU, MT and RO.the third quarter 5The Polish statistical office has revised theIn 2012q3, seven Member States recorded employment data from the third quarter of 2012,employment growth compared to the based on the results of the latest census. For thisreason 2012 q3 dataarecurrentlynotprevious quarter, against eleven which sawcomparable with data for earlier quarters.6Data available for 23 countries; employmentchange (y-o-y) in 2012q3 is not available in IE,LT, LU and MT. December 2012 I 12 13. Social Europe EU Employment and Social Situation I Quarterly Reviewand Poland (-460 000, -3.5 %)7 (see With Member States following differentChart 9).These employmentlosses paths, the gaps are wideningconcentrated in some Member States wereIn all, 19 Member States had annot offset by employment gains in others, inemployment level in 2012q3 below that ofparticular Germany (+360 000, +0.9 %),2008q1, including Poland (-0.1 %), FranceAustria (+40 000, +0.9 %), the United(-1.1 %), Italy (-2.4 %) andSpainKingdom (+515 000, +1.8 %) and Latvia(-14.7 %) (see Chart 10). The largest drops(+30 000, +3.4 %).during this four-year period were recordedAmong the largeMember States thein Latvia (-22.7 %), Greece (-17.5 %),situation is mixedLithuania (-16.1 %), Spain (-14.7 %) andIreland (-15.6 %). Eight Member StatesThe pattern is uneven among the largeshow in 2012q3 an employment gainMember States. Germany continues tocompared to 2008q1,amongthemenjoy employment growth, albeit slowing toGermany (+3.2 %) and the United Kingdom+0.1 % in 2012q3 (see Chart 9). The UK(+0.1 %). The largest employment gainsbenefited from a fourth consecutive quarterduring this period were observed inof rapid employment growth (+0.3 % inLuxembourg (+8.2 %) and Malta (+6.0 %).2012q3, after +0.7 %) and employment inWith Member States following differentPoland gathered pace (+0.4 % in 2012q3,paths, the gaps between them in terms ofafter +0.1 %). On the other hand,employment performance are widening.employment in France recorded a fall(-0.1 % in 2012q3) after a fourthconsecutivequarter of stagnation.Employment fell also in Italy (-0.1 %) andUnemploymentagain sharply in Spain (-0.8 %), whereas inThe number of people unemployed in thePoland the decline (-2.4 %) is largely ofEU continued to rise in recent months,statistical nature (see footnote 5). Also, in areaching a new record high above 26 millionlonger-term perspective, since 2008, the(26.061 million) in November 2012 (+0.6 %employment situation in Spain has weightedcompared to October 2012), correspondingmost on the overall European trend (seeto an unemployment rate of 10.7 %. In theChart 10).euro area, there were 18.8 millionunemployed in November, accounting forChart 10: Employment change since 2008q111.8 % of the labour force. The continuous(index 2008Q1= 100) in selected Memberincrease in unemployment in the EU in theStates20 months to November 2012 has led to asecond upsurge in unemployment, withclose to 3.5 million more people out of work(+15.7 %).Unemploymenttrendsremain moreunfavourable in the euro area than in theEU. Moreover, different trajectories causedthe divergence between EU Member Statesin terms of unemployment rates to widen.In November 2012, there was an upwardunemployment trend in two-thirds of theMember States, with rates rising quickly insome countries.Overrecentmonths, therate ofunemployment of young people (thoseunder 25) in the EU has accelerated and inNovember 2012, it reached 23.7 %, anSource: Eurostat, National accounts increase of 1.5 percentage points (pps) over[namq_aux_pem]; data seasonally adjusted. the year, while the overall unemploymentrate went up by 0.7 pp. See section onYouth at page 17.7Break in 2012q3 for PL, data are not directlycomparable, yet quarterly net change ispresented. December 2012 I 13 14. Social Europe EU Employment and Social Situation I Quarterly ReviewSteady increase in unemployment in the EU Chart 12: Monthly change in the number ofover the past 20 months, accelerating young, adult and total unemployed andrecentlymonthly number of unemployed in the EU,Jan 06 Nov 12Chart 11: Monthly unemployment rate in theEU-27 total and young people (15-24) andthe euro area, Jan 06Nov 12Source: Eurostat, Series on unemployment; dataseasonally adjusted [une_nb_m].Source: Eurostat, Series on unemployment; dataAfter amoderateslowdown inseasonally adjusted [une_rt_m]. summer 2012, the upward unemploymentIn the 20 months to November 2012, thetrend has been accelerating again sinceEU unemployment rate hasrisen September 2012, with an average monthlycontinuously.Asa result,theEU increase in unemployment of close tounemployment rate went up by 1.3 pps200 000betweenSeptember and(see Chart 11) to 10.7 %, representing 3.5November 2012, as against 60 000 in Julymillion more people out of work (+15.7 %, and August 2012.see Chart 12). This second upsurge in The increase in European unemploymentunemployment, starting in April 2011 andhas been more concentrated in the euroaffecting men slightly more than womenarea(respectively +1.5 pps to 10.8 % and+1.2 pps to 10.7 %),8 comes on top of the Between April 2011 and November 2012,rise in unemployment during the financial 94 % of the newly unemployed in the EUcrisis, when the 25 months betweenoccurred in the euro area (with 3.3 millionMarch 2008 and April 2010 saw 7.3 million newly unemployed). Consequently, the euromore people losing their jobs in the EU area unemployment rate has increased(+45.4 %).faster. Over the year to November 2012,the unemployment rate in the euro areawent up by 1.2 pps to 11.7 % comparedwith a rise of 0.7 pp in the EU (seeChart 13). Over the three months toNovember 2012, unemployment continuedto rise faster in the euro area than in the EUas a whole, with unemployment rate up by0.3 pp in the former, as against +0.2 pp inthe latter.8This is linked to the sectoral distribution ofemployment reductions, male-oriented sectorsremaining the most affected by the crisis. Seesectoral trends at page 50. See also Table 12 inAnnex 1 for the UR gender breakdown.December 2012 I 14 15. Social Europe EU Employment and Social Situation I Quarterly ReviewChart 13: Change in unemployment rate (%) 4.5 %) and that with the highest (Spain,over the last 12 months and last three26.6 %). As also highlighted in themonths to November 2012 Employment and Social Developments inEurope 2012 Review, ESDE 201210, most ofthe divergence has occurred between euroarea countries.Chart 14: Unemployment rates in the EU-27,euro area, US and the Member StatesOctober 2012Source: Eurostat, Series on unemployment; dataseasonally adjusted [une_rt_m].Notes: Data for EL up to Sep 12; UK: Movingaverage Aug-Sep-Oct 12; EE and HU: Movingaverage Sep-Oct-Nov 12; BE, BG, FR, CZ, DK, IE,Source: Eurostat, Series on unemployment; dataES, FR, CY, LV, LT, LU, MT, PL, PT, SI, SKseasonally adjusted [une_rt_m]quarterly data up to 12Q3. Last 3-month changevalue for LV = -1.6. Last 3-month change valueUnemployment rate rises have acceleratedfor EE = -0.6. Last 12-month change value for EEin four large Member States= -2.6.Among the large Member States, there wasan acceleration inthe increase inFurther widening gap between EU Memberunemployment in the three months toStates, due to an upward unemployment November 2012 in Spain (+1.0 pp totrend in two-thirds of the Member States26.6 %), Italy (+0.6 pp to 11.1 %), Polandand to a rapid rise in some countries (+0.3 pp to 10.6 %) and France (+0.2 pp toIn the three months to November 2012,910.5 %). In Germany, the number ofunemployment was up in 18 Member States unemployed has been falling continuously(see Chart 13). The highest rises wereover the past three years and during therecorded in Cyprus (+1.7 pps to 14.0 %),three months to November 2012, it fellGreece (+1.3 pps by September 2012, toagain by 0.1 pp to 5.4 %. In the United26.0 %), Spain (+1.0 pps to 26.6 %), ItalyKingdom, the number of unemployed went(+0.6 pp to 11.1 %) and Denmark (+0.5 ppdown slightly to 7.8 % in September 2012to 7.9 %). Over the same period, the(see Chart 13).unemployment rate remained stable in twoLong-term unemploymentcountries and fell in a further seven. Overthe three months to November 2012, theEU-aggregate long-term unemploymentlargest decreases were recorded in twocontinues its three-year upward trendBaltic countries - Latvia (-1.6 pps up toBy 2012q2, the number of peopleSeptember 2012 to 14.1 %), Estoniaunemployed continuously for more than a(-0.6 pp up to October to 9.5 %),year (long-term unemployed) had increasedRomania (-0.3 pp to 6.7 %) - and Irelandby 14.3 % (or 1.35 million people)(-0.2 pp to 14.6 %).compared to the same quarter of theWith diverging trajectories, the gapprevious year to reach a total of close to 11between EU Member States in terms ofmillion (10.88 million) (see Chart 15). EU-unemployment rates is continuing to widen.aggregate long-term unemployment grewThere is now an all-time record gap ofsteadily for the third consecutive year22.1 pps between the Member State with(+0.6 pp year on year) to reach 4.6 % ofthe lowest rate of unemployment (Austria,10 See the introductory chapter "Key features of9 For EL and UK: September 2012; for EE andthe current European employment and socialHU: October 2012; for LV: 2012q3. situation", section 1.1. December 2012 I 15 16. Social EuropeEU Employment and Social Situation I Quarterly Reviewthe active population in 2012q2 (see Chart 16: Long-term unemployment ratesChart 16). With this continuous rise, thefor the EU, the euro area and the Memberproportion of those among the active States in 2011q2 and 2012q2population who have been unemployed for % Active populationmore than one year has reached its highest 14level in decades, both in the EU as a whole122011Q2 2012Q2and in seven individual Member States. 10Chart 15: number of people unemployed forless than 12 months and for more than 128months in the EU, 2005-2012 6420EU27EASE SIPLEE ITPTSK IEESELATLU FINLDKDEUKCZBEMT ROCYFRHULT BGLV Source: Eurostat, LFS; data non-seasonally adjusted [une_ltu_q]. Long-term unemployment is set to continue to rise due to growth in the number of recently unemployed people The number of short-term unemployed has also surged since mid-2011, with close to 1Source: Eurostat, LFS; data non-seasonally million more newly unemployed in the EU inadjusted [lfsq_ugad].the year to 2012q2 (see Chart 15). ThisLong-term unemployment is rising in theincrease (+14.3 %) is the sharpest since themajority of the Member States, wideningincrease seen during the financial crisis. Thethe divergence between Member States current unfavourable trend will inevitably lead to a further rise in long-termStarting from an already diverging pattern unemployment.between Member States in 2011q2, thesituation of the long-term unemployed hasUnemploymentexitprobability hasworsened again. Long-term unemployment declined; on average 40 % of therose in 16 Member States in the year tounemployed in the EU are now likely to be2012q2 with particularly dramatic figures in out of work for more than one yearGreece, where it rose to 13.2 % (up by The chances of an unemployed person5.2 pps); in Spain, at 10.9 % (up by finding a job before becoming long-term2.3 pps); in Ireland, at 9.4 % (up byunemployed fell in the first quarter of 2012.1.2 pps); in Portugal, at 7.3 % (up by In fact there was an increase in the rate of1.0 pps); in Italy, at 5.6 % (up by 1.4 pps);transition to long-term unemployment,11and in Cyprus, at 3.2 % (up by 2.0 pps)which reached 37 % (see Chart 17). This(see Chart 16). In contrast, the situation ofmeans that, under current labour marketthe long-term unemployed has improved in conditions, an average of two in fiveseven Member States, in particular inunemployed people in the EU will remainGermany, where it fell to 2.5 % (downunemployed for more than one year. In0.4 pp), and in Sweden, at 1.3 % (down some countries, labour market prospects0.1 pp). Austria can boast the lowest long-have not worsened in recent years. Interm unemployment rate in the EU (1.1 %).Austria the probability of being unemployedIn comparison with their active populations, has remained low (below 5 %), as has thethere are 10 times more long-termprobability of going on to be unemployedunemployed people in Spain and Greecefor more than a year (below 20 %). At thethan in Austria. other extreme, in Spain, with the current labour market conditions, 1 in 4 active people is unemployed and 2 in 5 of the 11The rate of transition to long-term unemployment is calculated as the number of persons unemployed for a duration of 12-24 months divided by the number of persons unemployed for less than 12 months one year earlier.December 2012 I 16 17. Social EuropeEU Employment and Social Situation I Quarterly Reviewunemployedwill become long-termstability the inactivity rate among men fellunemployed.by 0.5 pp. The gender gap in activity ratesChart 17: Unemployment rate and the rate declined by a further 0.3 pp (down toof transition to long-term unemployment, 12.4 %), confirming a general decline since2006q4 to 2012q2 in the EU, Austria andthe beginning of the crisis (it having been atSpain: 14 % in the second quarter of 2008). Discouragement has been increasing among the smaller share of inactive people Unemploymentand long-term unemployment have surged during the crisis (now affecting 10.7 % and 4.6 % of the active population, respectively) and have been accompanied by an increase in discouragement. In 2011, the share of inactive persons that did not believe there was a job available was up by 1.5 pps (toSource: Eurostat, LFS;data non-seasonally5.2 %) compared to the onset of the crisis.adjusted [lfsq_ugad].The share of inactive persons who would like to work but who are not actively seeking employment increased over theInactivity and discouragementyear to the second quarter of 2012 by an additional 0.9 pp (it increased by 0.7 pp inInactivity in the EU keeps falling 2011 and by 0.2 pp in 2010).Despite thecontinuous increaseinunemployment, inactivity keeps decreasing. Chart 18: Inactivity rates for EU MemberThe inactivity rate declined by a furtherStates0.6 pp over the year to the second quarterof 2012 and it is now at 28.2 % (see Chart18). with strong declines in the Member Statesin which the inactivity rate was highThe decline in inactivity was concentrated inthe Member States with the highestinactivity rate (above 35 %), namelyRomania, Hungary, Italy and Malta, as wellas in the Netherlands which, on thecontrary, is converging towards the lowinactivity rate it had four year earlier Source: Eurostat, LFS;data non-seasonally(20.6 % in the second quarter of 2008). adjusted [lfsq_inac].Some Member States (Denmark, Germany,Portugal, Slovenia and Ireland) divergedfrom the general trend, with marginalYouthincreases in inactivity rates, or as in Cyprusand Belgium with a considerable increase inYouth unemployment is surging again, whilethe rate (up by 1 and 0.4 pps, employment remains depressed respectively). Over the year to the second quarter ofInactivity rates vary considerably across2012, employment declined by 3.7 %Member States (from 18.5 % in Sweden toamong young people (below the age of 25),37.4 % in Malta), although divergences are but only by a more limited 0.4 % among theless marked than at the beginning of the entire working-age population (15-64).crisis.Even more dramatic is the collapse of youth employment since the second quarter ofThe inactivity rate of men started declining 2008: -16.3 %, against -2.2 % in the entireFemale participation in the labour marketworking-age population. According to recentcontinued to increase over the year to the Eurostat estimates, youth unemploymentsecond quarter of 2012 (inactivity fell by has grown further over recent months,0.8 pp) and also men started to participatereaching 23.7 % in November 2012, up bymore. Indeed, after a period of relative December 2012 I 17 18. Social Europe EU Employment and Social Situation I Quarterly Review1.5 pps over the year, comparedwith The youth unemployment rate has always0.7 pp for the total population.been around 2.5 times higher than the ratefor adults (aged 25 to 74). While the adultYouth unemployment began to climb againunemployment rate stood at 9.3 % inin May 2011 and grew at a sustained pace November 2012, i.e. 3.6 pps higher than its with the exception of December 2011 andpre-crisis level of 5.7 % in early 2008, theJune 2012 , peaking at 5.8 million inrate for young people (now 23.7 %) wasNovember 2012. Between June andmarkedly up, by 8.7 pps from a low ofNovember2012,the number ofaround 15 %.unemployed young people rose by 266 000(+4.8 %, see Chart 19),whileChart 20: Youth unemployment rates for theunemployment among adults aged 25 to 74 EU by sex, 2008-2012also continued to increase, albeit more26slowly (+2.4 %). Compared with the 24TotalWomenprevious low point in April 2011, youth Menunemployment in November 2012 was up 22by a significant 636 000 (+12.3 %), driven 20mostly by the increase in jobless young18men (+13.4 %). 16Chart 19: Changes in unemployment among14young people and adults in the EU, 2008-2008 May2009 May2010 May2011 May2012 May 2011 Sep 2012 Sep 2008 Sep2008 Nov 2009 Sep2009 Nov 2010 Sep2010 Nov2011 Nov2012 Nov2008 Mar2008 Jul2009 Mar2009 Jul2010 Mar2010 Jul2011 Mar2011 Jul2012 Mar2012 Jul 2011 Jan 2012 Jan 2008 Jan 2009 Jan 2010 Jan2012Youth 15-24 Adults 25-74 800Source: Eurostat, Series on unemployment; dataseasonally adjusted [une_rt_m]. 600Employment decline for young people wasmost dramatic in both temporary and full- 400 Thousands 200time jobs 0As mentioned above, over the year to thesecond quarter of 2012, employmentdeclined by 3.7 % among young people, -2002008 Nov2009 Nov2010 Nov2011 Nov2012 Nov 2008 Sep 2009 Sep 2010 Sep 2011 Sep 2012 Sep2008 Mar2008 May2008 Jul2009 Mar2009 May2009 Jul2010 Mar2010 May2010 Jul2011 Mar2011 May2011 Jul2012 Mar2012 May2012 Jul 2009 Jan 2010 Jan 2011 Jan 2012 Jandriven essentially by a fall in temporarycontracts (-4.3 % vs -2.7 % for the 15-64Source: Eurostat, Series on unemployment; dataage group). The relative expansion of part-seasonally adjusted [une_nb_m]. time jobs (+1.5 %) was not sufficient to affecting both young women and menmake up for the recorded drop in full-timeemployment (-6.1 %).The downturn in 2008-2009 and thedeterioration seen last year have worsenedMore than 40 % of young employees in thethe labour market situation for young EU have temporary jobs, a figure that haspeople. At 5.8 million in November 2012,increased during the downturn. In theyouth unemployment in the EU went up by second quarter of 2012, the percentage44 % (nearly 1.8 million) compared to the stood at 42 %, up 2.5 pps on 2008q2, aspre-crisis level (March 2008), driven by aagainst 13.9 % for the entire working-agesharper rise in unemployment among youngpopulation. In the second quarter of 2012,men, up by 1 093 000 (+50.5 %), thanthere were 7.3 million temporary youngamong young women (+ 691 000, i.e.employees, 950 000 (roughly 12 %) fewer+37.3 %). thanfour years earlier.However,permanent employment declined by 2.7After remaining stable at around 21 % million (-19 %) to 11.5 million over thebetween autumn 2009 and mid-2011, the same period.youth unemployment rate has surged sinceautumn last year and passed the 23 % mark In the second quarter of this year, morein August 2012. It stood at 23.7 % in than 30 % of young workers were on part-November 2012, some 2.8 pps higher than time contracts: the exact figure was 32 %,the low recorded in February-April 2011.up 0.9 pp on the first quarter of 2012 andThe rate now stands at 24.5 % for young 1.7 pps on the second quarter of last year.men (+1.7 pps over the year) and 22.7 % The corresponding figure had been belowfor young women (+1.2 pps, see Chart 20). the 27 % mark throughout 2008. In thesecond quarter of 2012, there were 6million part-time young workers, the sameDecember 2012 I 18 19. Social EuropeEU Employment and Social Situation I Quarterly Reviewnumber as four years earlier, after having significant 4.5 pps to 32.8 % over the fourdropped to 5.7 million two years ago, butyears to the second quarter of 2012.full-time employment declined by 3.7 However, this decline was due not only tomillion (-22.3 %) to 12.7 million over the the surge in the unemployment rate (up bysame four-year period. Over the year to the6.6 pps to 23.7 % in November 2012) butsecond quarter of 2012, the number ofalso largely to the rise in the inactivity rateyoung part-timers crept up by 1.5 %, while (up by 1.7 pps to 57.8 % in 2012q2) (seethe number of young full-timers fell Chart 24). In the year to the second quartersignificantly, by 6.1 %. of 2012, the youth employment rate fell by 0.7 pp, as against only 0.2 pp (to 64.3 %)Rising inactivity and unemployment have among the whole working-age population.led to a declining youth employment rateReflecting overalljob losses,theemployment rate for young people fell by aChart 21: Youth unemployment rates and year-Chart 22: NEET rates in 2012q2 and changeson-year changes, November 2012since 2008q2Most Member States have to cope with Youth unemployment remains a seriousdramatically high youth unemployment problem in most countries, hitting historic highs in some. The youth unemploymentAs Chart 21 shows, the labour market rate is still over 15 % in all but foursituationfor young people varies countries (Germany,Austria,thesignificantly across Member States. Over Netherlands and Denmark). At anotherthe last year, the youth unemployment rate extreme, unemployment affects at leastincreased in all but eight Member States.30 % of active young persons in Portugal,While Mediterranean countries (Greece, Italy, Slovakia and Latvia, as well as inSpain, Slovenia, Italy, Portugal and France) Greece and Spain, where the number ofrecorded the highest year-on-year risesyoung unemployed persons has even(more than 4 pps), the rate went downexceeded that of the young people in worksignificantly in Estonia, Lithuania and thefor about one year (youth unemploymentUnited Kingdom (by -8.7, -6.7 and -rate higher than 50 %), with respectively1.9 pps) and, to a lesser extent, Ireland, 57.6 % in September 2012 and 56.5 % inRomania and Finland (down by almostNovember 2012.1 pps).December 2012 I 19 20. Social EuropeEU Employment and Social Situation I Quarterly ReviewGrowing long-term unemployment and Chart 23: NEET for EU Member States,inactivity pose serious risks for the young2008q2, 2011q2 and 2012q2generation25 2012Q2Following the large influx of young2008Q220unemployed persons in 2008 and 2009, 2011Q2their long-term unemployment rate first% of population 15-2415plateaued at around 6 % in 2010 through tomid-2011, up from 3.5 % in 2008. Afterlevelling out, the rate has worsened10recently, rising to 7.2 % in the first andsecond quarters of 2012 (see Chart 26). 5Consequently, nearly one in three youngunemployed persons has been without a job 0 LULT LV CZ BE EE UK CYES ROEL BG NL AT DKSE SI FI SK EU27 HUIEIT DEMT FRPL PTfor more than a year, compared withroughly 22 % at the onset of the crisis. Source: Eurostat, LFS; data non-seasonally adjusted [edat_lfse_20].The inactivity rate among young peopleremained virtually the same during 2011, atThe NEET rate rose in all Member Statesabout 57.5 %, up from 56 % two years during the four years to the second quarterearlier, but then suddenly rose to roughly of 2012, except in Malta (-3.0 pps),58 % in the first two quarters of 2012. To Germany (-0.9 pp) and Austria (-0.4 pp).some extent, this increase was the result of The largest surges were seen at thediscouragement. In the second quarter, 3 % periphery of the EU: Greece (+9.2 pps),of inactive young people were actually Ireland (+6.4 pps), Cyprus (+5.7 pps),seeking employment, the same share as in Italy (+5.4 pps), Spain (+4.7 pps) and thethe second quarter of last year, but up by Baltic States of Estonia and Latvia (roughly0.7 pp on the previous quarter. At the same+4 pps). Consequently, the NEET rate nowtime, 11.9 % wanted to work but were not varies more widely across Member States,seeking employment, a percentage close toranging from around 5-6 % in thepre-crisis levels, though. The share ofNetherlands, Austria, Denmark andinactive young persons who are out of theLuxembourg to around 20 % in Bulgaria,labour market due to education and trainingItaly and Greece.has remained broadly stable since 2005, at If the age group is enlarged to includearound 90 %. persons up to the age of 29, the NEET rateThe risks for young people in the EU lie inis generally 1 or 2 pps higher than in thethe rise in NEET, affecting the less educated15-24 age group. In 2011 on average, itin particularreached 15.4 %, against 12.9 % among those aged under 25. In both age groups,Given that so many young people are in the less educated12 account for nearly halfeducation, inactivity as such should not beof the NEETs (47.3 % for those aged lessthe major concern, but rather thethan 25, 42.9 % in the 15-29 age group).proportion of young people who are neither According to a recent Eurofound estimate,13in employment nor in education and the economic cost of not integrating NEETstraining (NEET). In the second quarter ofis estimated at over 150 billion, or 1.2 %2012, 12.6 % of young people (7.1 million) of GDP, in 2011 figures. Some countries,fell into the NEET category, up sharply (bysuch as Bulgaria, Cyprus, Greece, Hungary,around1.1 million) onthe 10.3 %Ireland, Italy, Latvia and Poland, are payingregistered four years earlier (see Chart 222 % or more of their GDP.and Chart 23). 12Pre-primary, primary and lower secondary education (ISCED levels 0-2). 13See also http://www.eurofound.europa.eu/emcc/labourma rket/youth.htm.Full report: http://www.eurofound.europa.eu/publications/ht mlfiles/ef1254.htmDecember 2012 I 20 21. Social Europe EU Employment and Social Situation I Quarterly ReviewYouth employment: Commission proposes The exceptional decline in the inactivity ratepackage of measures of older workers did not worsen theirrelative unemployment rateYouth unemployment remains "the mosturgent social matter".14 Fairness and equityCompared to other age groups, older peoplemeans giving a chance to young people.aged 55-64 have been the least affected byMeasures to help Member States tackle the downturn in the labour market in termsunacceptable levels of youth unemployment of unemployment, while their labour marketand social exclusion by giving young people attachment increased considerably.offers of jobs, education and training haveNotwithstanding an exceptional decline inbeen proposed bythe Europeanthe inactivity rate of older people (aged 55-Commission. Its Youth EmploymentPackage,15 launched on 5 December 2012, 64) by 1.8 pps (down to 47.3 %) (Chartincludes a proposed Recommendation to 24), the unemployment rate increased byMember States on introducing the Youth0.6 pp over the last year (up to 7.3 %, seeGuarantee to ensure that all young people Chart 25). The unemployment rate of olderup to age 25 receive a quality offer of a job,people nevertheless remains lower than forcontinued education, an apprenticeship or a otherage groups.Their long-termtraineeship within four months of leaving unemployment rate increased by 0.4 pp,formal education or becoming unemployed.and at 4.2 % is now lower than for primeage adults (4.3 %) (see Chart 26).Over the last four years of overall labourOther selected groups market downturn, the position of olderworking age people has been better thanIn the second quarter of 2012 the EU labourfor other age groups. Their unemploymentmarket situation deterioratedfurtherrate increased by 2.3 pps with respect to ancompared to the previous year, inaverage of 3.4 pps, the inactivity rateparticular, for the low skilled. Although thedeclined by 4.5 pps with respect to anlabour market situation of youth andaverage decline of 1 pps, while theirmigrants remains the most difficult (withemployment rate increased by 3.1 ppsunemployment rates over 20 %), thedespite a general decline of 1.6 pps.unemployment rate of prime age adults(25-54) and EU nationals also started toOlder working age people still vulnerable torise noticeably again.long-term unemployment and low labourmarket participationIn order to raise the overall employmentThe relatively favourable labour marketrate in the EU (now at 68.7 % for the 20-64situation of older people hides two aspectsage group) to the EU2020 target of 75 %,that make them still vulnerable. First,particular efforts are needed to boost thealmost 60 % of older unemployed are long-employability of older people aged 55-64term unemployed, while for young people(whose ER is now at 48.9 %), and of the(aged 15-24) the share is around half thislow skilled (52.5 %), migrants (56.7 %) andat 32 %. Second, the labour marketwomen (62.6 %) in the age group 20-64.participation of older people aged 55-64remains low, at 48.9 % in the secondquarter of 2012 and well below what isneeded to support reaching the Europe142020 employment target. This is how European Commission PresidentManuel Barroso had qualified the plight of youthThe risk of poverty and social exclusion forunemployment, in his State of the Union address older working age people is on the riseto the European Parliament in September 2011(see also http://ec.europa.eu/commission_2010-After a decline in the previous year, in 20112014/president/state-union-2011/index_en.htm).the risk of poverty and social exclusion forSee also other references (incl. to the Youth older working age people increased as muchOpportunities Initiative) in the March 2012 issue as for other age groups. Around 25.7 %16 ofof theQuarterlyReview:people aged 55-64 in the EU are nowhttp://ec.europa.eu/social/main.jsp?langId=en&c classified as living in poverty and socialatId=89&newsId=1255&furtherNews=yes15exclusion, up by 0.8 pp on 2010. The shareMoreinformationathttp://ec.europa.eu/social/main.jsp?langId=en&cof 55-64 year-olds classified as income pooratId=89&newsId=1731&furtherNews=yes andhttp://ec.europa.eu/social/youthemployment162011 data on poverty and social exclusion donot include Ireland and Italy.December 2012 I 21 22. Social EuropeEU Employment and Social Situation I Quarterly Reviewincreased by 1.2 pps (up to 14.8 %) in to34.7 %), whileseverematerial2011, while the share of severely materially deprivation remained fairly stable (atdeprived increased by 0.9 pp (up to 8.3 %).16 %). The share of migrants in a situation of poverty or social exclusion remainsMigrants in the EU are increasingly almost 60 % higher than that of nationalsunemployed or inactive (at 28 % in 2011).After a small increase in 2011, theunemployment rate of non-EU nationalsChart 24: year-on-year changes in inactivityincreased by 1.7 pps (up to 21.2 %) over rates for the EU by population subgroupsthe year to the second quarter of 2012 (seeChart 27). Their inactivity rate increased byan extraordinary 1.1 pps (up to 32 %),following a period of stability between 2010and 2011. The increase in the inactivity andunemploymentratespushed theemployment rate of non-EU nationals downto 53.5 % (-2.1 pps).The 21.2% unemployment rate for migrantsis still more than double the rate fornationals(9.6 %).The gap intheunemployment rate between nationals andSource: Eurostat, LFS; data non-seasonallymigrants was around 7-8 pps before the adjusted [lfsq_inac].crisis, jumped to 11 pps immediately afterand it is now at almost 12 pps. TheChart 25: year-on-yearchangesininactivity rate gap had fluctuated aroundunemployment rates fortheEUby2 pps before the crisis, it declined topopulation subgroups1.3 pps in the early phases of the crisis toslowly increase up to 3.8 pps in the secondquarter of 2012. Since the beginning of thecrisis, the increasing employment gapbetween nationals and migrants (11.3 ppsin the second quarter of 2012, 6.5 pps in2008 and around 9 pps until 2011) hasbeen mainly explained by the surge inunemployment for migrants (see Chart 28). and for a longer timeAfter a marked increase in the long-ternunemployment rate from 2009 to 2010,non-EU nationals suffered a further increase Source: Eurostat, LFS; data non-seasonally adjusted [lfsq_urgan] and [lfsq_urgaed].over the year to the second quarter of 2012(+1.1 pps). The long-term unemployment Chart 26: year-on-year changes in long-termrate of migrants is now at 9.5 %, while theunemployment rates for theEU bygap with nationals widened further.population subgroupsHowever,theshare of unemployedmigrants who have been without a job formore than one year (almost 45 %)remained broadly similar to that ofnationals.The labour market situation of migrants hasincreasingly pushed them into poverty andsocial exclusionThe risk of poverty or social exclusionamong migrants increased sharply in 2011up to 46.7 %, corresponding to an increase Source: Eurostat, LFS; data non-seasonallyof almost 5 pps with respect to the previous adjusted [une_ltu_q].year. The rapid deterioration of the socialsituation of migrants was mainly due to anincrease in monetary poverty (+2.5 pps upDecember 2012 I 22 23. Social Europe EU Employment and Social Situation I Quarterly ReviewChart 27: Unemployment rates for the EU bynationality Financial situation ofhouseholdsConsumer surveys carried out under thejoint harmonised EU programme of businessand consumer surveys can provide amongother things timely information on thefinancial situation experienced byhouseholds. In particular, the monthlyquestion about the current financialsituation allows to monitor the share of theEU population whose households are facingfinancial difficulties in terms of having toSource: Eurostat, LFS; data non-seasonallydraw on their savings or are running intoadjusted [lfsq_urgan].debt in order to cover their currentexpenditures.Chart 28: Changes (year-on-year and threeyears to 2012q1) in employment rate Results from recent surveys indicate thatbrokendowninto changesin thethe share of the EU population17 reportingunemployment ratio and inactivity rate fortheir households are experiencing financialthe EU by population groupsdistress18 has risen worryingly sharply inrecent months, reaching yet another newhistorical high19 at levels well above thoseobserved at any time in the previousdecade (see Chart 29). The recent jumpmainly reflects a sharp rise in the share ofhouseholds having to draw on savings,which is at a level clearly well above thatobserved in late 2008, when the financialcrisis was coming to a head in Europe.Chart 29: Share of EU population inhouseholds reporting financial difficulties(2000-2012)having to draw on savings 3 period moving av (having to draw on savings)Source: Eurostat, LFS; data non-seasonallyrunning into debtFinancial distress3 period moving av (running into debt)3 period moving av (Financial distress)adjusted [lfsq_emprt], [lfsq_unemp] and18[lfsq_inac]. 16Note: First bar - one-year change 2011q1-2012q1, second bar - four-year change 2008q1- 14% of population in response category2012q1 12 1086420Sep-00Sep-01Sep-02Sep-03Sep-04Sep-05Sep-06Sep-07Sep-08Sep-09Sep-10Sep-11Sep-12 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12May-00May-01May-02May-03May-04May-05May-06May-07May-08May-09May-10May-11May-12Nov-12Source: Joint harmonised EU consumer surveys;data non-seasonally adjusted.Sharp rises in financial distress have nowpermeated across all income groups. Overrecent months middle income households17 The sample underlying the consumer surveys isrepresentative of the adult population rather thanhouseholds in a given country.18 The combined population shares reporting theyare either having to draw on savings or arerunning into debt.19 The data series began in the mid-1980s.December 2012 I 23 24. Social EuropeEU Employment and Social Situation I Quarterly Reviewhave experienced the same marked rises in of Member States, with the sharpestfinancial distress that had been observed declines being recorded in Bulgaria, Greece,earlier in 2012 for the bottom and topand above all, in Ireland, Italy and Spain.quartiles (see Chart 30). Underlying this isOnly a few countries have witnesseda very sharp rise in the population inimprovements, namely Denmark, Swedenhouseholds in the two middle quartilesand France, but also Latvia, Lithuania andhavingtodraw ontheir savings. Romania, countries where the balance fellConsequently, while for the EU as a whole sharply after the 2008 economic crisis butpeople in the lowest income quartile stillwhere ithassomewhat recoveredexperience the highest levels of financialsubsequently.distress, the gap to the middle incomeChart 31: Change in the balance ofquartiles has reduced over recent months. consumer opinion on the current financialIn contrast, financial distress in the uppersituation in their households across EUincome quartiles has not changed very Member States (October 2012)much since the middle of the year.Chart 30: Reported financial distress in EUhouseholds by income quartile of household(2000-2012)Source: Joint EU harmonised consumer surveys &DG EMPL calculations; data seasonally adjustedNote: 3-month centred moving average figures.Returning to financial distress, similarpatterns as in the preceding balance figuresare reflected in the overall yearly change inthe financial distress indicator acrossSource: Joint harmonised EU consumer surveys &Member States. Italy recorded a particularlyDG EMPL calculations; data non-seasonally sharp rise in financial distress (of overadjusted13 pps), while Bulgaria, Greece, Ireland,Note: 3-month centred moving average figures. Portugal and Spain also recorded markedLong-term averages computed over 2000-2012.rises of the order of 5 pps. In contrast theThe marked divergence in developments inlevel of financial distress fell sharply inhousehold financial situations across Latvia and Romania.individual Member States continues (seeFocusing solely on households within theChart 31). In around half of the countrieslowest income quartile group - normallythe balance figures20 on the financialthose most likely to suffer from difficultiessituation in households have worsenedto cover their current expenditures - thenoticeably over the last three months,share of people experiencing financialparticularly in Italy and Spain, while, indistress has increased over the last year incontrast, improvements were observed inthe vast majority of Member States (seeseveral, most notably in Latvia and Poland.Chart 32). Of particular note are the strongOn an annual basis, over the year torises in financial distress among the lowerOctober the balance of consumer opinionincome quartile households in Bulgaria,has clearly worsened in around two-thirdsIreland and Italy, all with year-on-year risesof the order of 15 pps. Only a few Member20States have seen a fall in the share of lowerThe overall balance for the consumer surveyquestions reported here is calculated according toincome households reporting financialthe formula balance = (PP + P) (1/2 M + distress over the last year, most notablyMM), where PP is the number of the most positiveLatvia, Lithuania and Romania.responses (e.g. got a lot better, we are saving alot), P the no. of slightly positive responses (got a In a longer term perspective, comparisonlittle better, we are saving a little), M the no. ofagainst the average level of financialslightly negative responses (e.g. got a littledistress among lowest quartile householdsworse, we are having to draw on our savings), over 2007 highlights their much worsenedetc.December 2012 I 24 25. Social EuropeEU Employment and Social Situation I Quarterly Reviewsituation especially in Spain, Italy, Greece,(figures for change vs 3 months before 8.5 pps,Cyprus and Slovakia compared to prior to and one year 15.5 pps.the economic crisis, but also clearly Chart 33: Change in financial distress for theillustrates how consumers in many Member population in the lowest quartile and theStates are still suffering from thetotal population versus their pre-crisisaftereffects of the 2008 crisis. Comparisonaverages over 2007 (as at October 2012)of changes in levels of financial distress forthe lower quartile households with that forthe overall population (see Chart 33)suggests that the poorer households havesuffered relatively more from the effects ofthe crisis in most countries. However, itwould appear that poorer households havebeen relatively protected in some MemberStates, most notably in Belgium, Greece,Hungary, Portugal and Romania.Chart 32: Change in population share inhouseholds in the lowest income quartilereporting financial distress across the EU Source: Joint harmonised EU consumer surveys &(as at October 2012) DG EMPL calculations; data non-seasonally adjusted. Note: Based on 3-month centred moving averages.Source: Joint harmonised EU consumer surveys &DG EMPL calculations; data non-seasonallyadjusted.Note: Based on 3-month centred movingaverages. Break in series for Ireland in 2009.December 2012 I 25 26. Social Europe EU Employment and Social Situation I Quarterly ReviewBox 1: Situation in PortugalThis box provides a brief overview of recent socio-economic developments and forecasts inPortugal, a country that has received financial support from the EU, ECB and IMF in recentyears. Against a backdrop of a deepening economic downturn, unemployment in Portugal is atits highest level ever and set to rise further in the coming months.GDP shrank by 3.5 % year-on-year in the third quarter, a deepening of the downturn comparedto the previous quarter (when the decline was 3.1 %). All components of domestic demand(private and government consumption) are very weak, with year-on-year decline of at least4.5 %. As a result, imports are 8 % lower than a year ago, and net exports are the only factorcontributing positively to growth. Exports are 1.5 % higher than a year ago.Owing to the difficult economic situation and outlook, consumer confidence is, as confidence inthe services and construction sectors, close to its lowest level since 1990. Only industrialconfidence has improved somewhat compared to 2009. Employment in the third quarter of 2012was more than 4 % below the year-ago level. As highlighted by Chart 34, the decline inemployment figures was among the most significant falls in the EU, compared to other southernMember States and the rest of the euro area. Employment in Portugal has declined almostcontinuously for four years. Compared to the first quarter of 2008 set at 100, the employmentlevel stood hardly above the 90 mark, mirroring the trend witnessed in southern and peripheralmembers of the euro area. Spain and Greece did worse, reaching around 85.Chart 34: Employment developments in Portugal and selected (groups of) Member States,2008q1 2012q3, 2008q1 = 100 EU-27EA-17 EA - North EA - South and periphery Non-EA - North Non-EA - South and periphery Portugal Spain ItalyGreece104102100 98 96 94 92 90 88 86 84Source: Eurostat, National accounts [namq_aux_pem] and LFS [lfsq_egan] for Greece.Notes: EA - North (AT, BE, DE, FI, FR, LU, NL); EA - South and periphery (EE, ES, EL, IE, IT, CY, MT, PT, SI,SK); Non-EA - North (CZ, DK, PL, SE, UK); Non-EA - South and periphery (BG, LV, LT, HU, RO). No data forRO. 2012q3 data not available for IE, LU and MT: 2011q4 was considered for IE, 2012q2 for LU and MT.Reflecting the weakness in the labour market, both the job vacancy rate and the labourshortage indicator stand at very low level (in geographical and historical terms). In this context,the unemployment rate in Portugal registered a new historical record. It stood at 16.3 % inOctober, i.e. the third highest rate in the EU, after Greece and Spain. This is an increase of2.6 pps over October 2011, and of 7.8 pps over October 2008. Youth unemployment in Portugalis at its highest and also ranks third EU-wide after Greece and Spain at 39.1 %, up 6.0 ppsover the year and 19.8 pps since October 2008.According to the Commissions autumn 2012 forecast, unemployment is set to rise further in theremainder of the year, averaging 15.5 % of the labour force in 2012. In 2013, continued weakdomestic demand (shrinking by a further 2.5 %) is likely to weigh on employment (forecast todrop by a further 1.6 %). As a result, the unemployment rate is expected to peak at aboveDecember 2012 I 26 27. Social Europe EU Employment and Social Situation I Quarterly Review16 %, while the annual average for 2013 is projected at 16.4 %. Employment gains areexpected only in 2014, when the economy is set to gain traction due to accelerated exportactivity.Among the euro-area Member States, Portugal has the third highest percentage of poor people.Almost 2.6 million people were at risk of poverty or social exclusion in 2011, accounting for24.4 % of the total population, 0.2 pp above the EU average (18.0 % were at risk of povertyafter social transfers; 8.3 % were severely materially deprived; and 8.2 % were living inhouseholds with very low work intensity). Nevertheless, the number has fallen compared to2010 (25.3 %) and 2008 (26 %).Underlying labour Chart 35: Employees in permanent andtemporary work, self-employment and totalmarket and social employment (15-64) (1 000 persons), 2006-2012, y-o-y changedevelopmentsEmployment patternsIn the second quarter of 2012, a drop intemporary employment was behind most ofthe total decline in employmentOver the year to the first quarter of 2012the number of workers in permanent andtemporary employment at Europeanaggregate level decreased by -0.06 %(83 000 employees) and -3.2 % (760 000employees), respectively (see Chart 35).Since the second half of 2011 both types of Source: Eurostat, Labour Force Survey, data non-employment have been declining, gradually seasonally adjusted [lfsq_epgaed].reducing totalemployment. Self- Full-time employment is falling, drivingemployment has fallen too, dropping overdown total employment, while part-timethe year to 2012q2 by 0.5 % (150 000employment remains on a rising trendpeople) after three consecutive quarters ofcontraction.In the second quarter of 2012, the numberof full-time workers in the EU recorded itsIn the second quarter of 2012, the declinelargest annual drop since the financial crisis,in temporary employment accelerated, andfalling by 1.72 million. The downward trendaccounted for close to 80 % of the totalin full-time employment worsened inannual drop in employment. At the same2012q2 (-1 % year-on-year) after a -0.9 %time the decline in permanent and self- fall in the previous quarter (see Chart 36).employment eased. Seen over the medium term, full-timeemployment is in its fourth consecutive yearof contraction, down by 7.4 million (-4.1 %)since the second quarter of 2008. December 2012 I 27 28. Social Europe EU Employment and Social Situation I Quarterly ReviewChart 36: Number of part-time and full-time Vacancies: jobs starters andemployees in the EU (1000 employees) inthe EU, 2005-2012 leaversThe EU job-finding rate has furtherdecreased from an already low level, whilethe risk of unemployment has increasedThe job-finding rate in the EU, defined asthe monthly ratio of the number of peoplestarting a new jobto those inunemployment,21 decreased from 12.5 % in2012q1 to 12.1 %22 in 2012q2, its lowestlevel over the period under review (seeChart 37). This illustrates that it isincreasingly hard for an unemployed personto find a job. In addition, the risk ofSource: Eurostat, Labour Force Survey, data non-employed people in the EU losing their jobseasonally adjusted [lfsq_epgaed].(risk of becoming unemployed23) remainedrelatively high at 3.5 % in 2012q2, upAt EU aggregate level, the number of0.1 pp compared to the previous quarter.employees working part time has steadilygrown, rising by 740 000 over the year to Chart 37: Job-finding rate andrisk ofunemployment in the EUthe second quarter of 2012. The increase isaccelerating, with annual growth of +1.8 %in 2012q2 after +1.4 % in 2012q1. Over alonger-term perspective, there has beenconstant growth in recent years, with 2.6million more part-time jobs since thesecond quarter of 2008, a rise of 6.7 %.Consequently, part-time workers share oftotal employees in the EU has risenconstantly in recent years, reaching 19.3 %in the second quarter of 2012.Source: Eurostat, LFS; DG EMPL calculation.Over the past three years, the chance offinding a job on the EU labour market hasbeen relatively low, while the risk of anemployed person losing their job hasincreased with the crisisThe EU job-finding rate remained low overthe past year, as compared to the pre-crisisperiod. It has now dropped to under 13 %,from an average of over 20 % four yearsago (see Chart 37). The risk of becomingunemployed has remained high in the EUsince 2009 and has now reached anaverage of 3.4 %, increasing from less than3 % in 2006 and 2007.21 People starting a job include those previouslyin work and simply changing jobs (employmentto employment flows), those unemployed(unemployment to employment flows) or thosenot in the labour force (inactivity to employmentflows).22Average of the four quarters preceding2012q2.23 Monthly ratio of the number of people leavingtheir job to the number of people in employment. December 2012 I 28 29. Social Europe EU Employment and Social Situation I Quarterly ReviewIn the large Member States, exceptChart 39: Job-finding rate and risk ofGermany, the job-finding rate decreased unemployment in the EU and the Membersharply in recent years and is still dropping States in 2012q2in Spain, Italy and Poland, although itseems to have stabilised in France and the 4010 job-finding rate (Lhs)United Kingdom, albeit at a rather low level 9 35 risk of unemployment (Rhs)8(see Chart 38). Germany, on the other30 7hand, has seen a quasi-continuous increase 25 6in job prospects in recent years, as well as 205a decrease in the risk of unemployment.4 15 3Chart 38: Job-finding rate and risk of 10 2unemployment in the large Member States,5 12006-201200LUEE LT BG ROAT UK LVESGR SE BENL FIFR CZIEDKSICY EU-27PL ITHU DE MTPT SKSource: Eurostat, LFS; DG EMPL calculation.As recalled by Table 5 (at page 47), lifesatisfaction is closely linked to job security.Worsening job prospects has therefore hada negative impact on life satisfaction.Vacancies, labour shortages andhiring activitySource: Eurostat, LFS; DG EMPL calculation. The job vacancy rate fell in the third quarterMost Member States have seen labour In the third quarter of 2012, the EU jobmarket stagnation and low job creation in vacancy rate24 fell compared to the year-recent months ago level (1.4% against 1.5%). Year-on-The likelihood of finding a job fell sharply in year changes were small but negative in a2009-2010 and in nineteen Member States majority of Member States. Only thedecreased further in 2012q2, as comparedNetherlands and Germany saw largerto the previous quarter. In 2012q2, job declines over this period (see Table 15 infinding prospects were highest in Austria Annex 1).(36.4 %),Sweden (28.7 %),theIn December2012,theEuropeanNetherlands (26.8 %) and Finland (26.5 %).Commission published its first issue ever ofIn these four countries, under currentthe Vacancy and recruitment report.labour market conditions, an unemployedAmongst others, the report shows that,person theoretically has more than a 1 in 4notwithstanding a recovery in the numberchance of finding a job within one month.of vacancies in the EU, the pre-crisis levelsThe job-finding rate was above 10% in tenof 2007 had not been reached by 2011.countries, with the lowest rates in Spain(5.8 %), Slovakia (3.8 %) and GreeceIn the fourth quarter of 2012, the labour(2 %).shortage indicator, an alternative indicatorderived from EU business surveys results 25,The risk of losing ones job is increasing infell 1 pps, to 4.5 %, after it had hovered inthe majority of Member States, quite fast inthe 5.5 %-6.5 % range since the start ofsome countries2011. In the fourth quarter, the indicatorThe ratio of the number of people leavingtheir job to the number of people employedincreased in 2012q2 in fifteen Member24States (see Chart 39), as compared to the Source: Eurostat, Job vacancy statisticsprevious quarter. In Cyprus, Greece,(jvs_q). As the data are non-seasonally adjusted,Hungary, Malta, Portugal, Romania and only year-on-year comparisons are meaningful.See also the quarterly publication "EuropeanSpain the risk of unemployment has evenVacancyMonitor",surpassed the levels reached during the http://ec.europa.eu/social/main.jsp?catId=955&lcrisis. angId=en.25 Source: Eurostat, [ei_bsin_q_r2]. As the labourshortage indicator is seasonally adjusted, aquarter-on-quarter comparison is meaningful. December 2012 I 29 30. Social Europe EU Employment and Social Situation I Quarterly Reviewfell in most Member States, with large fallsAccording to Caden,28 the employmentin the United Kingdom and Germany.outlook weakens in the first quarter of2013, compared with one quarter ago.Hiring activity remains low in most EUConsidering the persistence of dishearteningcountriesnews and development, hiring intentionsThe Monster Employment Index Europe26,remain surprisingly resilient. Earlier in thegauging the online job posting activity,crisis, China managed to maintain a strongdeclined for the fourth month in a row, inperformance with positive spill-over effectsannual terms, recording a 4 % decrease in in the region and beyond. As China showsonline hiring over the year to November signs of softening, affecting German2012. Belgium and the United Kingdom areemployers hiring confidence, the US isthe only two regions to report annual finally showing clear evidence of a return togrowth, both up 1 %. All other regionsa healthy employment outlook at levels thatreport reduced online recruitment activityhas real potential to deliver job creation incompared to year-ago levels. Deceleration this quarter and those ahead. Europesis confirmed in Germany, recording 5 %uncertainties continue and improvement willdecline in November, after a growth of 2 %have to wait until the region gets some helpin October. from the expected improvements in the US.The sector of environment, architecture,On the longer term, looking beyond the firsturbanism recorded the seventh consecutive quarter of 2013, Germanys employmentmonth as the top performing industry on a outlook remains fragile until the USyear-on-year basis, while transport, post,economy is on firmer grounds. In France,logistics has seen the sharpest reductionsthe economy is stagnant and the businessforthe secondconsecutivemonth.environment continues to be unattractive.Managers (+5 %) see the greatest increase The governments reforms to tackle thein demand year-over-year of all countrys lack of competitiveness are notoccupations, while elementary occupations considered to be enough by investors or(-16 %) continues to report the weakest businesses. The employment outlook isrates of annual growth for the sixthweighed down by overly rigid labourconsecutive month.markets and social charges on companies.The Spanish employment market remainsAccordingto the first-quarter 2013extremely challenging. In decline sinceManpower Employment Outlook Survey,27 2008,there is little prospect ofthe majority of employers in the global improvement in the fourth quarter aslabour market are less confident aboutalmost all sectors continue to exhibitadding staff than they were at the start of negative hiring intentions.2012, suggesting a more difficult timeahead for job seekers. The weaker hiring while EUs temporary agency work sectorsentiment is most evident across Europe,has receded for nine months in a rowwhere employers in 13 of 24 countries areLatest data from Eurociett29 confirm thereporting negative outlooks for the firstdecline in temporary agency work in the EU,quarter, compared to eight countries justwhich is a leading indicator of developmentsthree months ago. Despite the uncertaintyin the labour market. For the ninth month inthat prevails in Europe, the German laboura row, the industry has witnessed a year-market shows signs of resilience, ason-year decrease in the number of hoursemployers there report a similar forecastworked. The agency work industry infrom three months ago. On the other hand,Europe recorded a decline of 9.3 % injob prospects are expected to be weakest inSeptember 2012, compared with the sameGreece, Italy and Spain. The uncertainty inperiod in 2011. The decrease of the industrydemand also extends to China, wherein Italy (-11.6 %), France (-11.5 %) andemployers report the weakest hiring plansGermany continues at high levels. Belgiumin three years. Meanwhile, U.S. employers(-6.9 %) and the Netherlands (-4.0 %) havesay they will hire at the same steady paceseen smaller reductions over the sameseen over the past six months.period.28 Source: CadenCorporation,"Global26 Source: http://www.monster.com.Employment Outlook", First Quarter 2013.2729Source:For further information on Eurociett, visit thehttp://www.manpowergroup.com/press/meos.cfwebsite at: www.eurociett.eu. Overall Europem.data include EU and Switzerland. December 2012 I 30 31. Social EuropeEU Employment and Social Situation I Quarterly ReviewProductivity, labour costs and Italy (up from a negative growth rate of - 0.7 % in the second quarter to 0.1 % in thehours worked third quarter) and Ireland (up from 1.4 % toLabour productivity growth remained2.3 %) showed the strongest increase, whilenegative or very low in most Memberin Hungary (+4.5 %), Austria (+3.5 %) andStates. Belgium (3.1 %) nominal compensation per employee growth remained strong.Following notable decreases in labourproductivity (per employed person) in theIn Germany (2.5 %) and France (2.0 %)second quarter of 2012 (compared to thenominal compensation per employee growthsame quarter in 2011) several Member remained close to the rates recorded in theStates (for which the data are available atsecond quarter.the time of writing) continued to record a Nominal compensationperemployeedecrease in their labour productivity. See decreased for the second quarter in a row inTable 16 in Annex 1. Spain (-0.3 % in the third quarter comparedFinland showed the strongest decrease, to -0.2 % in the second quarter) anddown from -0.3 % in the second quarter ofSlovenia (-0.9 % compared to -0.3 %),2012 to a notable -1.6 % decrease in the while it decreased by -0.8 % in Latvia, afterthird quarter comparing the quarter with recording a 1.0 % rise in the secondthe corresponding quarters in 2012.quarter.Nevertheless, this decrease was still smallerOther Member States recorded somethan the productivity loss recorded in the decrease in their growth rates, mostUnited Kingdom (down by -1.8 % in thenotable Finland (down from 4.0 % in thethird quarter, compared to -1.4 % in the second quarter to 2.6 % in the thirdsecond quarter) and Italy (down by -2.2 %, quarter).compared to -1.6 %). so that nominal unit labour costOnly Germany and Denmark could halt theirdevelopments differed somewhat acrossdecrease in productivity, while BelgiumMember States (-0.3 % in the third quarter comparedto -0.6 in the second quarter), HungaryDespite the weak productivity growth in(-1.1 % compared to -2.0 %) and Austriamost Member States, nominal unit labour(-0.2 % compared to -0.7 %) recorded a cost (which is defined as nominalslowdown in the pace of contraction. compensation per employee adjusted for productivity) grew overall at a weaker paceSpain (+2.7 %), Slovakia (+2.5 %), Cyprusin the third quarter of 2012 than the second(+1.1 %),Portugal (+0.6 %), France quarter of 2012 - if compared with the(+0.3 %) and Ireland (+0.2 %) are thesame quarters in 2011 (for the Memberonly Member States of the euro area that States for which the data are available atshowed positive growth rates in each of thethe time of writing). Nevertheless, somethree quarters of 2012 - if compared withnotable exceptions have been recorded. Seethe same quarters in 201130. Table 18.Among the Member States outside the euro In Ireland nominal unit labour cost growtharea, only Poland (+4.5 %) and Bulgaria(if compared with the same quarter in(+2.2 %) showed robust growth, while 2011) showed a strong increase (up fromLithuania (+9.5 %) recorded exceptionally0 % in the second quarter of 2012 to 2.1 %very strong productivity growth due to in the third quarter of 2012), while in Italyexceptionalabundantharvestsinthe acceleration was also notable (up fromagriculture and strong export growth in0.9 % to 2.3 %). In both Member States thisindustry.outcome was generated by lower labourg