EU Employment and Social Situation

Quarterly review
June 2011

CONTENTS
HIGHLIGHTS ............................................................................................................................................................ 3 INTRODUCTION ...................................................................................................................................................... 5 ECONOMIC CONTEXT........................................................................................................................................... 5 LABOUR MARKET SITUATION ........................................................................................................................... 6 EMPLOYMENT ............................................................................................................................................................ 6 UNEMPLOYMENT ....................................................................................................................................................... 7 LABOUR DEMAND ...................................................................................................................................................... 9 LABOUR MARKET DEVELOPMENTS.............................................................................................................. 11 EMPLOYMENT PATTERNS ......................................................................................................................................... 11 Special Focus: Shifts in the jobs structure during the Great Recession........................................................... 13 PRODUCTIVITY, LABOUR COSTS AND HOURS WORKED ............................................................................................. 16 Special Focus: Wages, productivity and labour cost in a macro-economic perspective .................................. 17 SECTORAL TRENDS .................................................................................................................................................. 23 Special focus: Volunteering ............................................................................................................................... 25 IMPACT OF RESTRUCTURING ON EMPLOYMENT .................................................................................... 27 RECENT SOCIAL TRENDS .................................................................................................................................. 30 LONG-TERM UNEMPLOYMENT AND INACTIVITY ....................................................................................................... 30 THE GENDER PERSPECTIVE ....................................................................................................................................... 31 THE SITUATION FOR YOUNG PEOPLE ........................................................................................................................ 32 LABOUR MARKET DEVELOPMENTS FOR OTHER VULNERABLE GROUPS ..................................................................... 35 Special focus: The impact of the crisis on the risk of poverty or exclusion...................................................... 37 LATEST DEVELOPMENTS IN SELECTED MEMBER STATES ................................................................... 41 OUTLOOK................................................................................................................................................................ 49 ANNEX I: SELECTED STATISTICS.................................................................................................................... 51

HIGHLIGHTS
2010 q1 2010 q2 1.0 2.3 0.2 -0.6 64.3 1.4 3.0 1.7 3.8 2010 q3 0.5 2.1 0.1 -0.1 64.6 1.4 2.2 1.2 3.8 2010 q4 0.2 1.9 0.1 0.2 64.2 1.5 1.7 2.0 4.0 2011 q1 0.8 2.6 0.0 0.3 : 1.6 2.1 2.7 :

Real GDP
(% change on previous quarter) (% change on previous year) 0.4 0.9 -0.1 -1.5 63.5 1.3 2.4 2.4 3.7

Employment growth
(% change on previous quarter) (% change on previous year)

Employment rate
(% of working age population, non-seasonally adjusted)

Job vacancy rate

(% of vacant and occupied posts, non-seasonally adjusted)

Labour productivity
(% change on previous year)

Labour cost
(% change on previous year)

Long-term unemployment rate

(% Labour force) 2010 Dec 2011 Jan 2010 Feb 2011 Mar 2011 Apr

Unemployment rate (seasonally adjusted) 9.5 9.5 9.5 9.5 9.4 Total (% of labour force) 9.5 9.5 9.4 9.4 9.3 Men 9.6 9.6 9.6 9.6 9.5 Women 20.7 21.2 20.6 20.5 20.3 Youth (% of labour force aged 15-24) The EU labour market is recovering slowly and unevenly. Although the EU has been out of recession since mid-2009, latest trends point to a rather jobless recovery, due to the persisting uncertainties about the economic and fiscal situation of some Member States. On a yearly basis, economic output growth picked up by 2.6 % by the first quarter of this year, while employment only increased by 0.3%.
Employment has improved since the second quarter of 2010, but significantly less than economic output. Moreover, the increases in employment are only due to part-time and temporary jobs: permanent employment was still declining at the end of 2010, even though at a slower rate. As often in the past, temporary and part-time contracts lead the business cycle, but at the same time this may cast some doubts about the quality of the recovery and the uncertainties that businesses are facing. During the Great Recession, job losses have been concentrated in the lower-middle of the wage spectrum while higher paid jobs have continued to increase in knowledge intensive services. There are, however, strongly different national patterns of adjustment, i.e. some countries face a polarisation of the work force with relative increases (or smaller decreases) at the top and bottom, others a downgrading with relatively more jobs at the bottom, and others an upgrading with relative more jobs at the upper end. Unemployment decreased to 9.4 %, but this benefited mostly Member States which already had a lower than average unemployment rate. The unemployment rate, for both women and men, had broadly stabilised at the beginning of this year, and decreased in April to 9.5 % for women and to 9.3 % for men, widening slightly the gender gap in favour of men again. Overall, the effects of the crisis remain more pronounced for men, who still account for 60 % of the total increase in unemployment since March 2008, and whose long-term unemployment rate nearly equalised, at 4 %, with that for women. Even if the overall trends during the last year points to a slight recovery of the labour market, longterm social risks are apparent, especially for specific sub-groups, including young people, migrants and low-skilled. Long-term unemployment, although with growth slowing by the end of last year, affects 4 % of the EU labour force, with the rate reaching nearly 8 % or more in Ireland, Latvia, Lithuania, Slovakia and Spain. Additionally, although the activity rate, at around 71 %, has remained stable in the EU, the risk of increased detachment from the labour market remains high in some Member States and for some population segments.

The labour market for youth has been improving for some time; however the overall impact of the crisis on young people remains significant. Unemployment still affects 20.3 % of young people who are active in labour market, and remains a major challenge in nearly all Member States, together with an increased risk of long-term unemployment(at around a 6 % level in the fourth quarter of last year). The recent 'Youth on the Move' Eurobarometer highlighted concerns about the current labour market for youth, but also pointed to the role of vocational training, higher education and mobility for the prospects on the labour market. The labour market has also started to stabilise for most of the other population subgroups, however the marked impact of the crisis on migrants and the low-skilled is still evident. Nearly 20 % of active migrants from non-EU countries and around 15 % of the active low-skilled persons in the EU are unemployed, and although the increase in long-term unemployment has been slowing down, it especially remains a risk for migrants and low-skilled (in the fourth quarter of 2010 at 8.0 % and 7.4 % respectively). The impact of the crisis on the risk of poverty or exclusion is beginning to appear in some Member States. Material deprivation and especially those aspects relating to financial stress faced by the households reflect the social impact of the crisis. Demand for labour is slowly improving after the crisis and an increasing but still limited number of posts are not filled. Firms' hiring plans and expectations are easing, pointing to newly growing uncertainties in the labour market. The restructuring activity reported in the European Restructuring Monitor continues to see announced job losses outnumbering job gains, but the gap is narrowing. Manufacturing and real estate/business activities account for the majority of business expansion. Labour productivity growth in the EU regained its upward momentum, growing by 2.1 % in the first quarter of 2011, if compared to the first quarter of 2010. Greece showed for the first time since the third quarter of 2008 positive productivity growth all be it at the very low rate of 0.1 % - while Germany reinforced its already strong growth (3.4 %). Labour costs increased by a modest 1.8 % in the euro area in the first quarter of 2011, whereby Greece was the only Member State that recorded a decrease. As a consequence, in the euro area unit labour cost growth was negative for the fifth consecutive quarter. In the European Union as a whole the unit labour cost continued to rise albeit at a lower rate. In the EU as a whole and the euro area, wages evolved in line with productivity growth over the 2001-2010 period. However, at the level of the individual Member States the picture is mixed. In some Member States, especially Germany, nominal wage growth was in check with productivity growth and low inflation. In the Southern Member States and Ireland, nominal wage growth outstripped labour productivity growth markedly yielding an important deterioration in the international competitiveness of these Member States. In the new Member States -except Cyprus and Maltasignificant divergences between nominal wage growth and productivity growth reflected a catching-up process. Economic recovery in the EU has been underpinned by improvements in industrial production since mid-2009. In the last quarters, industrial production, though increasing, has been easing while construction is still negative. Retail trade edged up in May but it is still quite volatile. This review analyses the volunteering sector, linked with the "European Year of Volunteering". Roughly one fifth of the European population is engaged in some form of voluntary work and the sector account up to 34 % of GDP in some Member States. According to the European Commission Spring forecasts, the EU economy is speeding up, but the outlook remains for a rather jobless recovery with unemployment stubbornly high both in 2011 and 2012. Worryingly, confidence on labour markets in the EU is broadly slowing down and the OECD leading indicators point to a loss of momentum. This edition of the Quarterly Review takes a closer look at the situation on the labour markets in Belgium, Denmark, Finland, Greece, Poland, Portugal, Slovenia, Spain and Sweden.
This quarterly monitoring report provides in-depth analysis of recent labour market developments. It is prepared by the Employment Analysis and Social Analysis Units in DG EMPL. A wide combination of information sources have been used to produce this report, including Eurostat statistics, reports and survey data from the Commissions Directorate-General for Economic and Financial Affairs, national and sectoral statistics, restructuring data from the European Restructuring Monitor (collected by the European Monitoring Centre on Change) and articles from respected press sources. The report has also 4 benefited from contributions from public and private employment services. The section on restructuring trends was prepared by the European Foundation for the Improvement of Living and Working Conditions. Contact: empl-a1-unit@ec.europa.eu

Introduction
According to the latest Monthly Labour Market Fact Sheets, released in May and June, labour markets in the EU are slowly recovering. Unemployment in the EU has started to decrease, but is still remarkably high, especially in some Member States. Given the economic and financial uncertainties, there are fears that conditions will remain weak for some time. This quarterly review provides a more in-depth overview of developments in the European labour market, including from a social perspective, based on the latest available quarterly (and monthly) data. It summarises shortterm trends in GDP and employment growth, changes in employment by sector and category of employment, working hours, trends in employment and unemployment rates (including for different subgroups), developments in labour demand and labour costs, and recent changes in economic sentiment and employment expectations. the EU (after 0.2 % and 0.3 % respectively in the previous two quarters). Gross fixed capital formation picked up again by 2.1 % in the EU27 (after a decrease of 0.2 % and then remaining unchanged at 0 %). Exports grew by 1.8 % and imports by 1.9 %. The improvement in economic activity was the result both of strengthening of the industrial sector, where output has been expanding since November 2009, and of a significant pick-up in the construction sector, after two negative quarters. Services, including trade, transport and communication, also recorded increased activity, although to a lesser extent than industry. output is expanding strongly in some Member States In 2009 the EU recorded a decrease in economic activity of 2.2 %, followed by an increase by 2.1 % in 2010. In the first quarter of 2011, GDP was 2.5 % higher than one year before (see Chart 1). Underlying that, economic activity was better than a year earlier in every Member State except Greece, where output declined by 4.8 % over the year. Among the large Member States, Germany and Poland are leading with healthy yearly growth of 4.8 % and 4.3 % respectively (see Chart 2). Growth over the year was also particularly strong in Sweden (6.5 %), Finland (5.8 %), Lithuania (6.8 %), Slovakia (3.6 %) and Bulgaria (3.4 %). Ireland recorded negative growth of 0.5 % over the year to the fourth quarter of 2010.
Chart 1: GDP and employment growth for the EU

Economic context
Economic activity in the EU is improving The EU has been out of recession since mid-2009, with global recovery fuelling a revival in demand for EU goods and services. In 2010 economic activity grew by 2.1 %, which was better than expected. Nevertheless, because of the persisting uncertainties, the recovery has remained fragile: economic output slowed down in the second half of 2010 but picked up again in the first quarter of 2011 to 0.8 %1. Among the large Member States, Germany is continuing to lead the EU recovery (up 1.5 % on the previous quarter). Poland and France also recorded a healthy 1 % increase in GDP in the first quarter of 2011, whereas Spain and Italy are still lagging behind (with growth of just 0.3 % and 0.1 % respectively in the first quarter). Economic activity in the UK picked up by 0.5 % again after the fall in the fourth quarter of 2010. Growth over the quarter was positive in all the other Member States except Denmark, where GDP decreased by 0.5 % over the first quarter. Economic activity in Greece increased by 0.8 % in the first quarter of 2011 after several negative quarters. The improvement in GDP over the first quarter of 2011 was the result of increased demand, both external and domestic. Household final consumption expenditure increased by 0.3 % in

Steady US growth while Japan is weakening In the US, economic output is growing steadily: in the first quarter of 2011 it increased by 0.5 %, fuelled by global recovery and increased demand for US goods and services, coupled with higher domestic demand driven by private consumption. On the other hand, government expenditure and investment decreased in the

first quarter. Overall, GDP growth revived to 2.3 % (see Chart 2).
Chart 2: GDP growth in EU Member States and the US, 2011 Q1

employment and restrained the increase in unemployment might also contribute to slow down the recovery compared to more volatile labour markets as the US. employment in the first quarter of 2011 is up on a year earlier Taking a longer-term perspective, year-on-year employment growth started to improve at the end of 2009, after turning negative in the first quarter of 2009 and reaching a trough of -2.2 % in the third quarter of 2009. Year-on-year employment growth finally turned positive in the fourth quarter of 2010 and closed on a seasonally adjusted 222.9 million (220.8 million nonseasonally adjusted) in the first quarter of 2011.

Labour market situation

Employment
The EU labour market has responded slowly to changed economic output The labour market in the EU has been seriously affected by the economic downturn and job losses have continued despite the fact that economic growth picked up again in the second half of 2009 (see Charts 1 and 3). However, the total fall in employment has remained more moderate than the fall in economic activity in the EU as a whole and in most Member States. While economic output in the EU contracted by a substantial 5.3 % between the peak in the first quarter of 2008 and the low in the second quarter of 2009 and has expanded since then, employment has contracted by 2.8 % from the peak in the second quarter of 2008 to the trough in the first quarter of 2010 (see Chart 1). The deterioration in the EU labour market resulting from the recent economic crisis has stopped and employment has been slowly recovering since the second quarter of 2010. Employment, which started to decline in the third quarter of 2008, one quarter after the contraction in economic activity began and reflecting the usual delayed reaction, is slowly responding to the economic recovery (see Chart 1). The number of persons employed in the European Union increased by 0.1 % in the third and fourth quarters of 2010 and remained stable in the first quarter of 2011, according to national accounts. Overall, the relative resilience of employment in the EU was partly the result of well functioning automatic stabilisers and a wide set of labour market institutions. However, the institutional settings that allowed a moderate decrease in

Chart 3: GDP and employment growth in the large Member States

Employment growth slightly accelerated in most Member States in the first quarter of 2011 During the first quarter of 2011, employment growth was positive in most Member States, but employment declined in eight of the 21 Member States for which data are available (see Chart 4). The decline generally eased, apart from Greece and Bulgaria, where the year-on-year change was respectively -5 % and -3.5 %. The overall impact of the crisis on the labour markets in Member States has been significant, most notably in Spain, Ireland and the Baltic States, but the latter are now recovering quicker.
Chart 4: Employment growth for EU Member States, 2011 Q1

Among the large Member States, employment fell in the first quarter of this year in Spain (by 0.4 %) and in Italy (0.6 %) but increased in Germany (by 0.3 %), France (0.2 %) and in the UK (0.4 %) (see Chart 3). Among the other Member States, employment fell notably in Hungary (down by 1.2 %), Bulgaria and Slovenia (down by 0.7 % and 0.6 %), Denmark and the Czech Republic and Portugal (all down by 0.1 %). Baltic States suffered a strong decrease in employment during the crisis, but in the first quarter of 2011 employment in Latvia and Lithuania increased by 0.2 % and 0.5 % respectively. Employment also grew in Austria (up by 0.3 %), Slovakia (1.5 %), Belgium (by 0.2 %) and Finland (by 0.3 %) (see Chart 4). Among the large Member States, year-on-year employment growth (non-seasonally adjusted) was negative in Spain (down by 1.4 %) and in Italy (by 0.7 %), whereas employment expanded in Germany by 1.4 %, France by 0.8 %, Poland by 2.1 % and the UK by 1.4 %. Among the remaining Member States, a part from the abovementioned Bulgaria and Greece, Romania (by 2.7 %), Slovenia (by 2.3 %) and Portugal (1.6 %) recorded the steepest falls in employment over the year (see Table 3). Services are leading the recovery The quarterly stagnation in employment has resulted from increases in industrial sector (up by 0.2 %) and financial services (up by 0.7 %) which were offset by a decrease in agriculture, hunting and fishing (down by 0.2 %) and in the construction sector (down by 1.1 %). Trade, transport and communication services and other services have seen no employment growth. Over the year 2010, services led the recovery in employment growth, whereas agriculture and construction all continued to decrease.

Chart 5: Changes in unemployment in the EU

Unemployment decreased markedly over the year Unemployment decreased in April by a robust 165 000 compared to the previous month (see Chart 5). Seasonally adjusted unemployment now stands at 22.5 million (22.6 million nonseasonally adjusted), down by a healthy 702 000 from the previous year. However, unemployment in the EU is still 6.5 million (or 40 %) higher than the low in March 2008. Unemployment had stabilised or declined in most Member States by April Unemployment had declined or stabilised in most of Member States by April, with the rate remaining stable or down on the previous month in 23 countries, while in the other Member States the rate of increase in unemployment had eased. Among the large Member States, the unemployment rate remained stable in Spain and Poland in April and in the UK in February and decreased by 0.2 pp in Italy and by a further 0.1 pp in Germany and France. Among the other Member States, the unemployment rate decreased noticeably in the fourth quarter of 2010 only in the Baltic countries after many months of steady increase (down by 1.6 pps in Estonia and by 0.9 pp in Lithuania). On the other hand, the unemployment rate increased noticeably in Greece by 1.1 pps over the fourth quarter and in Cyprus by 0.3 pp. and is beginning to decrease significantly over the year The unemployment rate in April was lower than a year ago in seventeen Member States and higher in nine, but with the year-on-year differences clearly diminishing (see Charts 6 and 7). Of the large Member States, only Spain recorded a steep year-on-year increase of 0.9 pp, with the rate in April rising to 20.7 % (equivalent to 4.8 million unemployed), which was the highest jobless rate in the EU.

Unemployment
The EU unemployment rate fell slightly in April Unemployment in the EU decreased by a further 0.1 pp to 9.4 % in April after four months at 9.5 %. The unemployment rate for the EU had been broadly increasing by 0.1 percentage point per month between May 2009 and February 2010, remained unchanged at 9.6 % thereafter, and finally decreased slightly in January by 0.1 pp to 9.5 %. The year-on-year gap closed to zero in December and unemployment in April was finally 0.3 pp lower than one year ago. As often after a crisis, the job recovery is proving slow.

Chart 6: Unemployment rate changes April 2010 - April 2011

Chart 7: Unemployment rates, April 2011

The rate decreased by 0.4 pp in Poland and in the UK and by 0.5 pp in Italy. In Poland it fell to 9.3 % (1.7 million unemployed), in the UK to 7.6 % (2.4 million) and in Italy to 8.6 % (2 million). The rate also decreased by 0.4 pp to 9.4 % in France (2.7 million unemployed) and by a healthy 1.2 pps in Germany to 6.1 % (equivalent to 2.6 million unemployed). Germany is now reporting its lowest unemployment rate in almost 20 years. Among the remaining Member States, the sharpest rises in the unemployment rate over the year were in Greece (by 3.9 pps), Portugal (1.7 pps), Lithuania (1.5 pps), Bulgaria (1.4 pps), Ireland (1.4 pps), Cyprus (1.2 pps) and Slovenia (1 pp). By contrast, the rate was down year-on-year particularly sharply in Estonia (by 2 pps), Latvia (2.9 pps) and Sweden (1.7 pps). Overall, due to the crisis, unemployment rates have increased most and are highest (after Spain) in the Baltic States of Lithuania (17.3 %), Latvia (17.2 %) and Estonia (13.8 %), but also in Ireland (14.7 %) and Slovakia (13.9 %). By contrast, they have increased least and remain low in Austria and the Netherlands (the two countries with the lowest unemployment rate, at 4.2 %) and Luxembourg at 4.5 % (see Charts 6 and 7).

EU consumers fears of unemployment are easing So far, 2011 has shown stable or better consumer perceptions of the general economic outlook compared with the end of last year. Consumers expectations for the labour market have broadly improved since April 2009. Unemployment expectations generally showed no change in the second part of 2010 and eased again in March, April and May (see Chart 8). The improvement in the unemployment outlook in May (down by 4 points) was driven by better expectations in all the large Member States. Fears of unemployment eased further in Germany (down by 1 point to the lowest level among the large Member States) and also in Poland (down by 9 points), France (5 points), Italy (5 points) and the UK (9 points). While fears of unemployment at EU level have eased considerably over the last year and a half, unemployment did not start to stabilise until spring 2010 and decreased slightly in January. It remains to be seen when the effects of the recovery in economic activity which has been picking up recently, but remains uncertain and confidence will feed through more strongly to the labour market. Developments in individual groups (male, female, youth, older and prime-age workers, nationals, and non-nationals) and in long-term unemployment and inactivity are presented in

detail in the section Recent social trends (see page 30).

Chart 8: Unemployment rate and expectations for the EU

2007, before falling to 9.6 % by August 2010 and to 9.1 % in May.

Chart 9: Unemployment rate and BCI for the EU and the US

US unemployment rose again in May The US labour market started recovering last November and unemployment dropped by 0.9 pp in two months. However, in the last two months unemployment started increasing again. After dropping to 8.8 % in March, unemployment bounced back to 9 % in April and 9.1 % in May, still 0.4 pp lower than in the EU. The US labour market initially benefited from a faster and stronger economic recovery and higher business confidence index (BCI2) than in the EU starting in autumn 2009. However, over the last few months confidence has waned, and now the BCI is higher in the EU than in the US. The number of unemployed persons increased by 200 000 in May (to 13.9 million), while employment stayed broadly stable, pointing to a return to activity of previously inactive workers. The gap between the US and EU unemployment rates, which was 0.2 pp in favour of the EU last year, had disappeared by the end of 2010 and is now favourable to the US (see Chart 9). Overall, the impact of the crisis on the labour market was more moderate in the EU than in the US, reflecting the difference in labour market institutions that cushioned the effect of the crisis in the EU. Unemployment in the US has more than doubled (up by around 120 %) from the low of spring 2007, whereas in the EU the increase has been more limited at 46 % compared with the low recorded in spring 2008. By February 2010 the unemployment rate in the EU had risen to 9.6 %, up 2.9 pps from the low in March 2008, after which it stabilised before decreasing in January to 9.5 %. Meanwhile, in the US the unemployment rate had increased by a more substantial 5.7 pps (to 10.1 %) by October 2009, compared with May

Labour demand
EU firms employment expectations have eased over the last few months Since spring 2009, businesses have reported relatively better expectations for employment for the months ahead across all the main sectors. However, while employment prospects in industry have followed a consistently upward trend for the last year and a half, repeated falls in the outlook for construction have continued this year and recently progress has been more sluggish in the service sectors too3. In April and May, employment expectations eased in every sector, with a particularly sharp decrease in the financial sector (down by 7.8 points) after several months of strong increases. The construction sector finally reached a zero balance in April (i.e. the same number of the firms interviewed expected an increase as a decrease in employment in the next 12 months) but fell back below zero again in May. In industry too employment expectations decreased. Only services showed a slight improvement after a marked decrease in April (see Chart 10).
Chart 10: Sectoral employment expectations for the EU

and hiring plans in the third quarter indicate modest progress According to the June Manpower Employment Outlook Survey4, the year-on-year hiring outlook improved modestly across Member States, with Germany reporting the most optimistic expectations since the downturn, but Italy and the UK remaining subdued. Hiring expectations remain mixed in Europe, as was the case last quarter: hiring plans are strongest in Romania, Bulgaria and Poland and weakest in Spain, Greece and Italy. Strikingly, the manufacturing sector appears to be gaining some traction across Europe, with hiring intentions improving in most countries compared with last year. Meanwhile, US employers expect hiring activity to be relatively stable or to improve from three months ago. Job vacancies are increasing in the EU and in most of the Member States In the first quarter of 2011, the estimated job vacancy rate for the EU27 was 1.6 %. This was an increase of 0.3 pp compared with the same quarter of a year before, showing increasing unfilled demand. The rate was higher than a year ago in most Member States for which data are available, with demand in the first quarter of 2011 particularly high in Malta (3.0 %), Germany (2.7 %), Finland (2.7 %) and Austria (2.3 %). Among the larger Member States for which data are available, demand for new labour increased in Germany in the fourth quarter, where at 1 041 477, vacancies were up on the previous quarter (by non-seasonally adjusted 45 000). Vacancies are increasing also in France (up by 0.4 pp to 0.7 %) and slightly in the UK (up by 0.1 pp to 1.7 %). On the other hand, job vacancies remained stable in Poland at 0.7 % and decreased in Spain by 0.4pp to 1.1 %. Official sources in Germany confirm the relative improvement in demand for labour in recent months. In Germany, the Federal Employment Agencys job index (BA-X5), which had been edging upwards for a year, decreased for the first time in May by two points to 164. It is not yet possible to understand if this indicates a stabilisation or just a temporary break. Overall, however, the demand for labour is still very high. The quarterly representative enterprise surveys by the Institute of Employment Research found 1 055 000 vacancies during the first quarter of 2011, which is 398 000 or 61 % more than one year ago. Registered vacancies hardly changed in May, after going up by 13 000 in April and by 8 000 in March.

European online recruitment eased in May According to the Monster Employment Index6, online job demand increased by 21 % in May compared with levels a year earlier. Online recruitment activity eased in May after marked increases in the previous months. In May, online job demand increased for production, manufacturing, maintenance and repair and for transport, post and logistics but actually declined for public administration, defence and community service. while demand for temporary agency workers is higher than a year ago in every country Recent data from Eurociett7, covering the period until March, continue to show an improvement in workplace activity via temporary employment agencies, which is a leading indicator of recovery in the labour market. The number of hours invoiced exceeds the levels recorded a year earlier in all the countries reviewed by a margin ranging from 10 % in the Netherlands to 17.2 % in Belgium, 19.5 % in France, 25.7 % in Germany, 27.6 % in Italy and 37.8 % in Poland. In the EU countries reviewed, hours invoiced increased on average by 21.6 % over the year (see Chart 11). Data from the UK show that agency work further increased in March.
Chart 11: Hours worked invoiced by private employment agencies for selected Member States

10

Labour market developments

The general trends in employment mask significant differences across groups (but they are covered in more detail in the 'Recent social trends' section), Member States, sectors and types of employment. This section provide an insight into the dynamics underlying the slight overall improvement in the labour market outlook, notably part-time and temporary work, working hours and labour costs, and into sectoral developments. A special focus section explores wages, productivity and labour cost in macroeconomic perspective. 0.6 pp) and the increase in self employment and temporary jobs, which represented 0.2 pp and 0.3 pp respectively. In most Member States, permanent jobs were still adversely affecting employment growth (see Chart 13). Over the year to 2010 q4, permanent work negatively impacted overall employment growth in 19 countries. The countries with the worst such impact, namely Bulgaria, -3.8 pps, Greece, 2.5 pps and Ireland, -2.2 pps, were those with the steepest fall in total employment, with - 4.7 %, 3.9 % and - 2.9 % respectively (y-o-y, 2010 q4). Self employment contributed positively to employment growth in 14 Member States. In 19 Member States, temporary jobs had a positive impact on employment in 2010.
Chart 13: Contribution to y-o-y employment change, 2010 q4, in Member States (percentage points of total employment)

Employment patterns
Permanent work still declining, albeit more slowly, while self employment and temporary work increase In the fourth quarter of 2010 the number of people in employment was down by 250 thousand compared with the same quarter in 2009 (with 212.83 million people in employment in 2010 q4 against 213.08 million in 2009 q4). Compared with three years previously, it was down by 3.9 million. Over the year to the fourth quarter 2010, the fall in the number of people in employment is explained by a massive drop in permanent jobs, down by around -1.2 million, outweighing the rebound of temporary jobs, up by 670 thousand, and the increasing number of self-employed (incl. family workers), up by 270 thousand.
Chart 12: Year-on-year change in permanent, temporary, self employment and total employment (15-64) (1 000 employees), 2006-2010

The decrease in permanent jobs still hits young people disproportionately Over the year to 2010 q4, the decrease was still disproportionately weighted towards young people, who lost 520 thousand permanent jobs, representing a 4.6 % decrease (see Chart 14). Compared with two years previously, the loss was -14.2 % (1 760 000 fewer permanent jobs for young people).
Chart 14: Year-on-year change in permanent employment by age group in the EU, 2006-2010

In most Member States, permanent work adversely affected total employment while temporary employment had a positive impact The fall in employment in the EU-27 (250 thousand people or -0.1 % in 2010 q4) was the sum of the drop in permanent jobs (which accounted for Prime-age workers were comparatively less hit, with a -1.1 % decline over the year to 2010 q4 (1 350 000 fewer people) and -3.1 % (3 850 000

11

fewer people) compared with 2008 q4. On the other hand, the number of permanent older (5564) workers increased by 3.3 % (660 thousand more employees) in 2010 q4 year-on-year and by 6.3 % (1 170 thousand more workers) compared with two years previously. The number of prime-age and older temporary workers increased in 2010 At EU level, the number of persons (15-64) on temporary contract has been growing since the second quarter of 2010, with a yearly gain of around 670 thousand (up by 2.7 %) in winter 2010. Young people (15-24) benefited only marginally from the growth in temporary work. Indeed, in winter 2010 compared to the year before, temporary jobs increased by 590 thousand (up by 3.8 %) for prime-age employees and by 60 thousand for older employees (up by 4.3 %). On the other hand, the number of young temporary workers recorded slight growth (up by 0.2 %, with 20 thousand more people).
Chart 15: Year-on-year change in temporary employment by age group in the EU, 2006-2010

down by 0.4 % (810 thousand fewer people) in 2010 q4 year-on-year. The number of older people in full-time employment fluctuated in positive territory in 2010, and recorded 3.2 % growth in winter 2010 (up by 680 thousand).
Chart 16: Change in the number of part-time, full-time, and total employed (1000 employees) in the EU, 2006-2010

Over the year to the fourth quarter 2010, the growth of part-time employment was shared between prime-age workers (up by 190 thousand, +0.7 %) and older workers (up by 240 thousand, +4.0 %), while the number of young part-time employed people fell by 40 thousand (0.7 %) (see Chart 16). The trend of employment by age group was the same in 2010 as in 2009, albeit less pronounced. and also among EU Member States Like the EU as a whole, most Member States saw the number of part-time workers contribute positively to employment growth (up in 19 countries, y-o-y change in 2010 q4). Over the period, full-time employment was on the increase in 10 Member States. Depending on the countries, full-time and part-work made a varying contribution to employment change in 2010 q4 compared with one year before (see Chart 7).
Chart 17: Contribution to year-on-year employment change, 2010 q4, full-time and part-time total employment in EU Member States

Part-time work was increasing while full-time was decreasing, both at a slower pace in the last quarter of 2010 Over the year to 2010 q4, the fall in employment (-0.1 %, down by 250 thousand) was explained by the fact that the decrease in full-time jobs (down by 640 thousand) outweighed the increase in part-time jobs (up by 390 thousand) (see Chart 16). The negative impact of full-time jobs on employment softened gradually in 2010 and the growth of part-time jobs slowed down in winter 2010. Consequently, the result was a decrease in total employment, but at a slower pace. with substantial groups differences between age

At EU level in the fourth quarter of 2010, the number of full-time jobs fell sharply for young workers (down by 510 thousand, - 3.5 % compared with 2009 q4) after a steep drop in 2009. The decrease in full-time jobs for prime-age workers moderated gradually in 2010, and was

12

SPECIAL FOCUS: SHIFTS IN THE JOBS STRUCTURE DURING THE GREAT RECESSION

Five million jobs lost during the Great Recession in the EU A net five million jobs disappeared from the second quarter of 2008 and the second quarter of 2010 in the EU27 during the Great Recession and employment growth in the recovery phase has remained muted to date though with large variation in labour market performance among Member States. after 20 million net new predominantly better quality - jobs were created in the decade preceding the crisis This follows what appears in retrospect a golden age of employment expansion in Europe from the late-1990s to before the Great Recession when over 20 million net new jobs were created. Considering a job as a given occupation (e.g. a skilled trade/craft worker) in a given sector (e.g. construction), earlier work confirmed that the majority of new employment between 1995 and 2006 was created in higher-paying jobs, i.e. those in the top two quintiles when ranking jobs by median hourly pay. The jobs that contributed most to employment expansion were in higher-level (associate) professional and managerial positions in business services as well as education and health. Overall, there was relatively low growth in medium-paying jobs and somewhat greater growth in lower-paid jobs. The pattern differed among Member States but with the majority of countries conforming to one of two broad patterns of job shift: upgrading or polarisation (Fernandez-Macias and Hurley, 2008). In what follows, we summarise the results of some recent Eurofound analysis using the same jobs-based approach to look at the quality of the jobs destroyed in the EU during the Great Recession, again using wage as a proxy of job quality. How do the qualitative patterns of employment shift during a period of sharp employment contraction compare to those during the preceding period of employment expansion?
Chart A.1: EU employment level changes by job-wage quintile (left lowest paid to right highest paid) comparing 1998-2007 and 2008q22010q2 (,000s)

Source: EU LFS (authors calculations), Fernandez-Macias 2010. Note: earlier analysis covering 1998-2007 omitted PL, MT, RO, BG due to data availability

Recession job losses concentrated in jobs in (lower-)middle of wage spectrum The most obvious observation is that the sign of the quantitative employment shifts change. There was a net loss of just over five million jobs (or 2.5% of total employment) in the EU27 in the period analysed (2008q2 to 2010q2). These job losses were overwhelmingly concentrated in the middle and lower-middle wage quintiles. This reflects the fact that over 10% of construction and manufacturing sector employment in the EU-27 was shed during the recession. Jobs in these sectors tend to cluster in the middle and lower-middle of the wage structure. but with continuing growth in higher-paid jobs in knowledge-intensive services Notwithstanding the different signs, the relative qualitative employment shifts by quintile are actually quite similar before and during the recession. Top-quintile jobs grew both in relative and absolute terms during the crisis. Seven hundred thousand net new jobs were created in top-quintile jobs primarily in state funded sectors health, education and public administration.

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As in the preceding decade, the top quintile job growth was mainly due to an increase in Knowledge Intensive Services (KIS). These include both public services (mainly in education and health) and private services (business services). The relative importance of the public services for top quintile employment growth increased during the recession. Asymmetrical polarisation before and during the Great Recession There was relatively greatest loss of employment in the middle and lower middle quintiles as before and only very modest loss in the lowest quintiles. Overall, the pattern of employment shifts during the recession was more clearly one of polarisation consistent with trends already observed in many developed economies of a disappearing middle or a hollowing out of the employment structure. Collapsing construction booms in several member states e.g. Spain, Ireland, the Baltic countries - in particular accentuated this pattern. Though generally associated with the decline of manufacturing, there are other important factors behind the disappearing middle. One is the polarisation of service sector employment. Services tend to generate employment at the top and the bottom of the employment structure but comparatively little in middle-ranking jobs. During the recession there has also been a polarised distribution of employment shifts for part-time and temporary work. Also shifts in gender composition of the labour force have been polarising: women tend to be under-represented in the middle of the job-wage distribution and men, who suffered greater employment losses, over-represented. ...but different national patterns of employment shift upgrading, polarisation and downgrading As in the previous analysis, different patterns of employment shift during the recession were observed from Member State to Member State though broad clusters could be identified. However, even where countries shared a similar pattern of shift e.g. polarisation in the case of France and Spain the specific jobs contributing most to these shifts were often quite distinct. In France, growth at the top was strongest amongst managers and engineers in private services (consultancy, financial services, IT) while in Spain, comparatively limited losses in the top quintile were attributable in large part to growth in the number of teaching and health professionals compensating net declines elsewhere.
Chart A.2: Patterns of employment shift (,000s), 2008q2-2010q2, by Member State

Polarisation

Upgrading

Downgrading

Source: EU LFS (authors calculations)

In addition to the two main patterns polarisation and upgrading a number of Member States experienced a downgrading of their employment structure during the recession. In other words, lower-paid jobs grew while there was net job destruction in higher-paid jobs. In the longer time period covered by the earlier analysis, no Member State had experienced such a downgrading which suggests recession-specific effects in some member states. The group of downgrading countries included perhaps surprisingly Denmark, the Czech Republic, Hungary as well as Italy and Lithuania. There is no obvious common explanation. Four of the five largest growing jobs in the Denmark, for example, were in the bottom quintile and included retail salespersons and restaurant service workers. Meanwhile the biggest growth in Hungary was in lower-level public administration workers (elementary occupations).

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The recession impacted less on female employment, both quantitatively and qualitatively Female employment had a comparatively soft landing during the crisis in both quantitative and qualitative terms, as the Chart above illustrates. The lions share of top quintile employment growth in the EU-27 has been female. This has resulted in large part from continued expansion of professional-grade jobs in the predominantly female-employing health and education sectors. Meanwhile net female job losses have been exclusively in middle and low-paid jobs; employment losses for women were greatest in four bottom-quintile jobs including retail salespersons, blue-collar workers in textiles/clothing manufacture and in agriculture. There was in fact a clear contrast between the patterns of employment decline for men and women with an upgrading pattern evident for women and a stark polarisation pattern for men.
Chart A.3: Patterns of employment shift (,000s), by gender and age groups.

and employment for those over fifty actually grew in jobs across the wage spectrum Europes ageing workforce became older faster during the recession as a result of sharp differential impacts of job loss by age group. As we see in Chart A.3, employment loss has affected younger and core-age workers mainly in middle and lower-middle paid jobs. Younger workers also suffered job losses across all quintiles and did not partake of any of the net employment gain in highest-paid jobs. Perhaps the most striking feature of the Chart is that employment for those in the pre-retirement age group (50-64) has been comparatively impervious to the recession enjoying growth across all quintiles but with a concentration at either end of the wage spectrum. The sectors in which employment growth was greater for core-age than for old age workers tended to be in private services (management consultancy, civil engineering, and other professional, scientific and technical activities). Those in which older workers benefited most from employment growth tended to be in predominantly public services (health, education and social work activities). For more detailed analysis refer to the full report, Shifts in the Job Structure in the EU during the Great Recession, at the Eurofound website: http://www.eurofound.europa.eu/publications/htmlfiles/ef1141.htm

References: Fernandez-Macias, E. and Hurley, J. (2008): ERM annual report 2008, More and better jobs?: Patterns of employment expansion in Europe, Dublin: Eurofound. Available at: http://www.eurofound.europa.eu/publications/htmlfiles/ef0850.htm Fernandez-Macias, E. (2010): Changes in the Structure of Employment and Job Quality in Europe (PhD Thesis), University of Salamanca.

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Productivity, labour costs and hours worked

Labour productivity growth in the EU regained its upward momentum Labour productivity grew by 2.1 % in the EU in the first quarter of 2011, compared to the first quarter of 2010, re-bouncing from the fall recorded in the fourth quarter of 2010 (see Chart 18). All Member States, for which data are available, recorded a positive rate for labour productivity growth during the first quarter of 2011, if compared with the first quarter in 2010. Greece showed for the first time since the third quarter of 2008 positive productivity growth all be it at the very low rate of 0.1 % - while Germany reinforced its already strong growth (3.4 %) (see Table 13). Among the other large Member States Spain (2.3 %) and Poland (2.5 %) showed also strong productivity growth. However, France (1.4 %), Italy (1.7 %) and especially the UK (0.4 %) displayed weakening productivity growth, reflecting to some extent in the UK the overhang of the contraction in construction due the bad weather. In the Euro area, most small countries' labour productivity growth hovered between 1.5 and 2 %, with the exception of Slovenia that recorded a growth rate of 4.4 %. In Lithuania productivity growth remained robust, but in Estonia and Latvia it continued its downward trend in a noticeable way, down from respectively 6.1 % and 1.9 % in the fourth quarter of 2010 to respectively 2.1 % and 0.2 % in the first quarter of 2011.
Chart 18: Annual productivity growth in the EU (annual % change)

(5.0 %) .In Bulgaria catching up is still the dominant force underlying the very strong productivity growth. while nominal labour cost grew steadily Compensation per employee in the euro area increased by a modest 1.8 % in the first quarter of 2011, if compared with the first quarter of 2010, which is slightly up from the growth rates recorded during the previous two quarters (see table 14). For the Member States for which the data are available, Greece was the only Member State that recorded a decrease in its nominal compensation of employees. Among the euro area Member States Germany listed the highest increase in nominal compensation per employee (2.6 %), but this remained still below labour productivity growth (3.4 %). Bulgaria continued to show a strong increase in nominal compensation (7.1 %) which is more or less in line with its growth in labour productivity (7.3 %). In the Baltic States, nominal compensation per employee growth remained robust after they had experienced some strong decreases in the first half of 2010. so that the decline in unit labour costs continued in most Member States In the euro area unit labour cost growth was negative for the fifth consecutive quarter, indicating that nominal compensation per employee grew at a slower rate than labour productivity so that wage induced inflationary pressures remained subdued in most euro area countries(see Table 15). This outcome is due to the fact that in times of recovery, even if it is mild, the output grows faster than labour market variables due to all kinds of rigidities in hiring and firing and wage setting. In the European Union as a whole the unit labour cost continued to rise albeit at a lower rate. This outcome is due to the fact that in most non-euro Member States the growth in nominal compensation per employee was larger than the growth in productivity. Germany saw a decrease in the nominal unit labour costs for the fifth quarter in a row. In France and Italy the increase in unit labour costs continued while in Spain the decrease slowed down, though it should be noted that this is the fifth quarter in a row that the unit labour cost fell in Spain. Austria recorded the strongest decline in unit labour cost, following two previous quarters of decrease. Estonia and Latvia continued their downward trend in unit labour cost developments, while in

All in all, overall productivity growth in the EU regained its upward momentum thanks to the strong performance of the earlier mentioned Member States as well as Bulgaria (7.3 %), Finland

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Lithuania the increase that started in the third quarter of 2010 persisted. Table 16 shows that in the EU as a whole as well as in the euro area, real wages (i.e. wages deflated by prices) have been falling below productivity growth since the first quarter of 2010 as is shown in the developments of the real unit labour costs. As far as the available data indicate, it is only in the Czech Republic (1.2 %) and Slovakia (0.4 %) that the real wage increased by more than productivity in the first quarter of 2011. The largest decreases in real unit labour cost are to be found

in Estonia (-5.5 %) and Lithuania (-6.6 %), strengthening earlier observed decreases. In the euro area, Austria (-3.6 %) and Finland (-3.7 %) recorded the largest decreases Hours worked showed some progress To the extent that the available data allows us to draw conclusions, one can say that in the first quarter of 2011 weekly working time of full-and part-time employees continued its fairly stable pattern observed over the year 2010 (see Table 17). This is to a large extent due to the less intensive use of short-time working arrangements over this period.

SPECIAL FOCUS: WAGES, PRODUCTIVITY AND LABOUR COST IN A MACRO-ECONOMIC PERSPECTIVE

This section reviews longer term trends in wages and labour cost in the European Union and discusses their macro-economic implications for competitiveness and incomes. A starting point for the analysis is the comparison of the trend in labour productivity (expressed in terms of GDP per employed personi) to nominal wage developments, through the unit labour costii. Through transformations of the latter it is possible to establish the importance of inflationary pressures stemming from labour cost, and to monitor international competitiveness and the labour income share. This analysis should be read against the background of the recent communication of the European Commission on correcting macro-economic imbalancesiii. Labour productivity and nominal compensation per employee Table 18 shows the evolution of labour productivity in the EU, euro area and the different Member States for the period from 2001 until 2010. In the EU as a whole compounded labour productivity growth over the 20012007 period was 8.7 %. For 2008 and 2009 a negative growth of -0.4 % and -2.4 % was recorded, followed by a positive strong growth of 2.3 % in 2010, resulting in a negative compounded growth rate of -0.7 %. This profile in labour productivity growth in recent years is in line with the global economic downturn and hesitant recovery, generating business cycle effects in labour productivity due to the lagged response of employment growth to output growth. During the economic downturn (2008-2009), output decreased faster than employment so that productivity growth fell, and during the (modest) economic upturn (2010) output increased faster than employment so that productivity growth rose. This slower adjustment in labour may be due to market rigidities, e.g. employment protection legislation or to market perceptions in the sense that the downturn is expected to be temporary and to avoid firing and hiring costs employment is kept stable. In addition, employers may use the employees they have on the payroll with varying intensity (extra hours in the peak, reduced hours in the through) before considering layoffs or hiring. The Euro area shows a similar profile for labour productivity growth as the EU, but at lower rates, i.e. compounded growth over the 2001-2010 period reaches 5.1 % and -0.5 % over the 2008-2010 period. At the level of the Member States, several groups can be distinguished with respect to their performance over the 2001-2010 period, whereby Romania had the strongest compounded productivity growth, i.e. 77.5 %, while Italy recorded the lowest growth i.e. -4.7 %. There is the group of countries, including Estonia, Latvia, Lithuania and Romania which showed over the entire 2000-2007 period annual labour productivity growth rates above 5 % (with a few exceptions). This catching up in productivity reflects the effects of ongoing restructuring of the inefficient production structure inherited from the past. In Estonia and Latvia the first signs of negative labour productivity growth emerged in 2008 when the overall economic outlook in these countries deteriorated, initially following a bursting of the property bubble and slowdown in domestic demand, which was later on reinforced by the collapse of global financing and trade. Bulgaria, the Czech Republic, Poland, Slovenia and Slovakia also showed strong productive growth over the 2000-2007 period - albeit at a lower average rate than observed in the earlier mentioned Member States. In these countries the negative growth in labour productivity started a year later, in 2009, but rebounded

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significantly in 2010. Apart from the downturn in 2001, most EU15 Member States showed modest labour productivity growth up to 2007. Notable exceptions were Ireland and Sweden, and to a lesser extent Greece, which recorded nearly twice the rate of productivity growth of the EU27 over the decade. Following the global economic crisis, labour productivity growth in most EU15 Member States became negative in 2008 and 2009, but in 2010 it became positive in all Member States, except Greece. The fall in productivity in Greece reflects a sharp fall in output due to a sharp drop in domestic demand (investment and private consumption in particular) and a relative small decrease in employment. Turning to labour costs, we observe a noticeable difference concerning labour compensation across Member States (labour cost is measured by the nominal compensation per employeeiv). Table 19 shows the annual growth of nominal labour cost for the period from 2000-2010. Romania shows by far the highest increase, i.e. a compounded growth of 479.6 % over the 2001-2010 period, while Bulgaria and the Baltic Member States recorded compounded growth rates well above 100 %. Over the same period, the lowest compounded growth is recorded for Germany, i.e. (11.5 %). Among the original members of the Euro area, Greece (58.4 %) showed the highest growth, followed by Ireland (49.7 %), Spain (39.0 %) and Portugal (36.4 %). Over the period 2008-2010 Romania showed by far the strongest compounded growth rate in nominal labour cost, i.e. 115.4 %, while a negative compounded growth of -4.9 % is recorded for Latvia. In the Euro area, Ireland showed the lowest compounded growth (1.5 %) over the same period, followed by Germany (4.3 %). With the onset of the global economic downturn, the Baltic States and Hungary experienced a decline in the nominal labour cost in 2009 and 2010. Ireland, Greece and Malta are the three other Member States that also recorded a drop in compensation per employee in 2010. In 2010 the strongest growth in nominal labour costs is to be found in Bulgaria where it increased by 7.2 %, far larger than the increases recorded in the other Member States, among which the Czech Republic and Slovenia recorded 3.8 and 3.9 % respectively. Macro-economic imbalances Nominal labour cost is difficult to interpret in absolute terms, therefore nominal compensation per employee (or any other nominal labour cost measure) must be related to another variable to give it a specific interpretation. The nominal wage deflated by a price index yields the real wage. The nominal compensation per employee divided by labour productivity yields the unit labour cost. The nominal compensation per employee divided by both labour productivity and a price index yields the real unit labour cost and the nominal unit labour cost deflated by a weighted average of the unit labour costs of the trading partners yields the real effective exchange rate (REER). It is these last concepts that will be further explored in order to assess the impact of productivity and wages on macro-economic stability. The unit labour cost which is defined as the ratio between the nominal compensation per employee and the productivity per employed personv is an indicator for measuring the sustainability of wage and labour productivity developments, as it gives insight in three important transmission mechanisms through which labour productivity and labour costs affect growth and jobs. First, the unit labour cost indicator gives an indication of domestic (cost-push) inflationary pressures. When the nominal unit labour cost increases it is an indication that nominal wages increase by more than productivity. If this happens then the risk exists that prices may have to be increased (by more than the sustainable 2 % per annum inflation target in the medium run) in order to restore equilibrium between (wage) costs and output,assuming no structural changes that affect the equilibrium labour income share. Nevertheless, it must be noted that the causality does not always run from unit labour cost to inflation, but may also be reversed in specific scenarios such as in the case of cost-push inflation generated by oil price increases provided one fails to offset second-round price effects. Second, the unit labour cost indicator is an indicator that can be used to assess the development of a country's international cost and price competitiveness, if it is compared with the nominal unit labour cost in the trading partners. Nevertheless, it must be noted that this indicator based on only unit labour costs does not reflect all costs, including capital costs, R&D expenditure and distribution costs. Third, the nominal unit labour cost divided by the GDP deflator, i.e. the real unit labour cost, gives an indication of the evolution in the wage share (or labour income share) over time, or in other words, the evolution of the real wage relative to productivityvi. These three transmission mechanisms will be discussed in more detail in the following paragraphs.

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Cost push inflationary pressures Table 20 shows growth rates for the unit labour cost in the different Member States over the periods 20012010, 2001-2007 and 2008-2010. Over the period 2001-2010 Germany compounded the lowest total increase in its unit labour cost, i.e. 6 %, while Southern Member States (Italy, Spain, Portugal, Greece) and Ireland all had increases by more than 25 % (even 37.5 % in the case of Greece). All new Member States, except Cyprus and Malta, showed very strong increases, with Romania recording the strongest increase (225.7 %). The New Member States, except Cyprus and Malta, showed very high compounded growth rates because of strong catching-up following the ongoing restructuring of the inefficient production structure inherited from the past. During the period 2001-2007, Romania showed the highest increase in nominal unit labour costs, i.e. 166.3 %, followed by Latvia (83.9 %) and Estonia (52.8 %). Germany was the only Member State that listed a drop in the nominal unit labour cost (- 0.7 %) over the same period. More recent developments show that during the period 2008-2010 the overall increase in nominal unit labour cost was modest in most Member States, however notable exceptions are Bulgaria and Romania where the increase over this period exceeded 20 %. In Denmark, Greece, Luxembourg, Slovenia, Finland and the United Kingdom the increase was in excess of 10 %. In 2010 the increase in unit labour costs is rather low, with most Member States showing a drop in the nominal unit labour cost.
Chart B.1: Compounded productivity growth > 10 % 2001-2010 and nominal compensation Chart B.2: Compounded productivity < 10 % 2001-2010 and nominal compensation growth

Charts B.1 and B.2 illustrate that strong ULC growth stems from compensation growth exceeding productivity growth and that differences in compensation growth is the prime driver of the differences in ULC growth across Member States. If one takes into account that a compounded inflation rate of an annual inflation close but below 2 %, would yield a compounded general price level increase of about 20 % over the period 2001-2010 then one can see that overall wage-cost push inflationary pressures were on average within the targets of low inflation, with the euro area recording an compounded growth of 19.6 % - mainly due to the modest 6 % increase in Germany. However, as indicated above some Member States recorded a compounded growth well above 20 %, i.e. Southern Member States and Ireland all had increases by more than 25 % and Greece even an increase by 37.5 %. Chart B.3 illustrates the strong correlation that exists between the compounded unit labour cost growth and compounded inflation, whereby it should be remembered that correlations do not necessarily indicate causalityvii. Charts B.4 shows the levels of the unit labour cost in the Member States of the euro area, i.e. the compensation per employee in current euro prices related to the real productivity per employed person in constant euro prices. Abstraction made of differences in the structure of output, Chart B.4 shows that Slovakia has the lowest unit labour cost of the Euro area, followed by Ireland and Germany. Ireland's ranking reflects a relative low level in 2000 and a relative strong increase over the 2001-2010 period, while Germany's ranking is the outcome of a favourable position in 2000 and low growth over the 2001-2010 period. The highest unit labour cost is to be found in Slovenia, followed by Estonia, Spain, Belgium, Greece and Portugal. Among the Euro area Member States, Slovenia and Estonia recorded the highest compounded growth in their unit labour cost over the period 2001-2010.

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Developments differ also in terms of sectors. Table 21 shows the compounded growth rate of the nominal unit labour cost for the 2001-2010 period of the main sectors of the euro area and its Member States.
Chart B.3: Compounded ULC growth and inflation 2001-2010 Chart B.4: Unit labour costs in the euro area - levels

In the euro area, the construction sector saw the highest compounded increase in its unit labour cost over the period 2001-2010, reflecting the idea that wage inflation takes place mostly in non-tradable sectors, notably services and, in particular, in the construction sector. In Ireland the unit labour cost fell sharply in industry and rose significantly in the construction sector over the period 2001-2010. In Greece strong increases are to be found in all sectors except in trade, repairs, hotels, restaurants, transport and communications during the period 20012010. Nevertheless, unit labour cost in this sector rebounded significantly during the period 2008-2010. Spain recorded a decrease in its unit labour cost in construction in the 2008-2010 period. Among the new Member States, except Cyprus and Malta, Romania showed the highest compounded growth across all sectors, with particular high increases in services. Poland showed the lowest increase in its sectoral unit labour costs with noticeable decline in agriculture and industry. All in all, in the new Member States construction and finance show the highest increases in unit labour costs. The real effective exchange rate Table 22 shows the developments in the Member States' nominal unit labour cost relative to its principal competitors in international markets - taking into account nominal exchange rate movements, i.e. the real effective exchange rate (REER)viii. A positive sign indicates that international cost competitiveness deteriorates. For the EU as a whole, the real effective exchange rate showed an upward trend over the period from 2001 until 2008, indicating a steady deterioration of external competitiveness of the European Union up to the beginning of the crisis when it started to improve, reaching a fall of 7.2 % in 2010. At the level of the Member States, the compounded increase over the period 2001-2010 in the REER was more than 60 % in the Czech Republic and Slovakia, while negative in Germany (-4.8 %), Poland (-3.4) and Sweden (7.1 %). The sharp increases in the real effective exchange rate since accessing to the EU up to the start of the crisis in Estonia, Latvia and Romania are very noticeable. In the euro area, except for the new Member States, the strongest increases over the period 2001-2010 are recorded for Ireland (+24.5 %) and Italy (+22.2 %). Over the period 2001-2010 and among the EU-15, the gap widened between Sweden and the UK on the one hand (with negative indicators), and Italy, Denmark and Ireland on the other hand (indicators of 20 % or more). In 2010 all real effective exchange rates, except those of Poland, Sweden and the UK, improved with the strongest improvement in Latvia, followed by Lithuania and Ireland. When the REER depreciates, international competitiveness will increase, having the potential to lead to higher exports and lower imports which may have a positive effect on employment. Chart B.5 shows a positive correlation between the cumulative growth in employment and the REER for the EU15 Member States. Nevertheless, more detailed research shows that the relation between ULC and export performance is weak and of second order of magnitude compared with the deterioration of the trade balance (and hence the former

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cannot be the cause of the latter)ix. Limitations of the REER indicator are that the REER based on ULC does not reflect all costs, including capital costs, R&D expenditure, and distribution costs. This indicator does also not take into account "pricing-tomarket behaviour" whereby firms (partly) offset variations in the exchange rate by adjusting their profit margins, instead of instantly passing the movement in the exchange rate on to prices charged to foreign customers. As such, the REER provides useful insight in the developments in international competitiveness in the short run i.e. when for instance the capital stock is a predetermined variable. In the medium term as capital stocks adjust, a broader definition is required to guide policy making. Moreover, economic theory posits that in the long run trade between countries is conducted on the basis of comparative advantages, not absolute advantages. However, absolute advantages are (in the long run) important at the level of individual enterprises or sectors. Chart B.6 shows a comparison of the evolution in a selected group of euro area Member States for the period from 2000 until 2010. Their unit labour cost of the industry is compared with the euro area average. As they are all expressed in euro the interpretation of these figures are straightforward to interpret.
Chart B.5: Compounded employment and REER growth EU15 2001-2010 Chart B.6: ULC of industry relative to euro area average ULC of industry

Note: An increase in REER indicates a worsening in international competitiveness

Greece shows by far the strongest increase in its unit labour cost of industry compared to the euro area average, while Ireland shows the strongest decrease. Estonia showed initially a trend away from the euro average, but returned towards the euro average as of 2009. Real wages and the real unit labour cost Table 23 shows the evolution of real wages and salaries, i.e. the nominal wages and salaries deflated by the harmonised consumer price index (HCPI). This indicator reflects the evolution in households' purchasing power. For this reason it will also be worthwhile to investigate to what extent real wage growth kept up with productivity growth. The strongest real wage growth is to be found in Romania (133.0 %) followed by Latvia (98.2 %), Estonia (70.4 %) and Bulgaria (62.9 %). Greece is the only Member State that recorded a negative compounded growth of real wages over the period ranging from 2001 until 2010. Germany and Portugal showed the second lowest growth, i.e. 4.2 %. The real unit labour cost measures the labour income share, or in other words, the relation between real wages and productivityx. Table 24 shows that the real unit labour costs in the EU as a whole showed a negative growth rate until the onset of the crisis in 2008 (except for 2000 and 2001), indicating that the labour income share (also called "the wage share") decreased over that period. It increased by 0.8 % in 2008 and 2.8 % in 2009 followed by a decrease of 1.4 % in 2010. In the euro area, the real unit labour cost had a negative growth rate over the whole period ranging from 2000

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to 2007, while it increased by 1.5 % in 2008 and 2.8 % in 2009 followed by a decrease of 1.3 % in 2010. This temporary increase in the real unit labour cost reflects the fact that in times of economic downturn the real compensation per employee is less responsive to cyclical fluctuations than output or employment. The structural decline observed over the years is a reflection of various structural factors, including technological progress and globalisationxi. Concluding remarks The previous analysis investigated to what extent developments in labour productivity and labour costs contributed to macro-economic instability. The following insights were gained from this analysis. First, examining the evolution of the nominal unit labour cost there was no indication that for the Euro area or the EU as a whole the wage developments posed a risk for cost-push inflation pressures. However, at the level of the individual Member States the picture is mixed. Some Member States showed low compounded growth rates, especially Germany. Other Member States were confronted with significant inflationary pressures. Here one has to make a distinction between the new Member States, except Malta and Cyprus, and the EU15 Member States. In the case of the former Member States the strong growth in the unit labour cost reflects an adjustment process to the catching-up process. In several Member States, including the Southern Member States and Ireland, the unit labour cost exceeded the threshold which is consistent with a close but below 2 % inflation target at the level of the individual Member States due to strong nominal compensation growth and relatively weak productivity growth. Second, developments in the real effective exchange rate (based on unit labour costs) show that several Member States, (including, apart from the new Member States which underwent significant catching-up, Ireland, Denmark, Italy, Greece and Spain) sustained losses in competitiveness (of more than 15 % over the 2001-2010 period) and significant diverging trends in competitiveness across Member States have been built up over several years. Third, examining the real unit labour cost indicator there was some mixed evidence on the evolution of the labour income share. Member States where real wage growth was well above productivity growth, i.e. where the labour income share increased by more than 5 percentage points over the 2001-2010 period, are Ireland, the Czech Republic, Finland and Denmark. Member States were the real unit labour cost decreased by more than 5 percentage points, include Romania, Poland, Lithuania, Hungary, Luxembourg and Spain. Notes:
i ii iii iv Although it is considered appropriate to use the number of hours as labour input indicator, it is most common practice to use the number of employees as denominator (because they are easier to obtain). This may pose some problems if the number of employees is not expressed in full time equivalents and part-time workers participate in the production process. The unit labour cost is defined as the ratio between the nominal compensation per employee and the productivity per employed person. European Commission (2011), "Concluding the first European semester of economic policy coordination: Guidance for national policies in 2011-2012", COM(2011) 400 final. Compensation of employees covers the total remuneration - including gross wages and salaries (before deduction of taxes and employees' social security contributions), employers social security contributions , as well as bonuses and overtime payments -, that is payable, in cash or in kind, by employers to employees in return for work done by the latter during the accounting period. Alternative concepts include total labour costs (employee compensation as well as the cost of vocational training, recruitment costs etc., minus subsidies received) and wages and salaries (included in employee compensation, see above). Other definitions of the unit labour costs (ULC) exist. The OECD calculates the unit labour as the ratio of total labour costs to real output, which differs from the EC-ECB definition notably by the weight given to the self employed. The real unit labour cost (RULC) is obtained by dividing the nominal unit labour cost (ULC) by the GDP deflator (PGDP), i.e. RULC = ULC / PGDP = (Compensation of employees at current prices) / (GDP in volume * (no. of persons employed/ no. of employees), i.e. the socalled "adjusted labour income share" Rearrange terms further it can also be proven that RULC = ((Compensation of employees at current prices / no. of employees) / PGDP) /((GDP in volume / no. of persons employed) i.e. the real wage relative to productivity. In other words, the RULC gives also an indication as to what extent real wage growth keeps up with productivity growth. The observation outlier for Romania is not included in the chart. The real effective exchange rate (REER) measures a Member States' nominal unit labour cost relative to a weighted average of the nominal unit labour cost of its principal competitors in international markets - taking into account nominal exchange rate movements, i.e. REER = NEER * weighted average(ULC / ULCf) with NEER the nominal effective exchange, defined as the weighted average of bilateral exchange rates, ULC the domestic unit labour cost and ULCf the unit labour cost of trading partners. A rise in the index means a loss of competitiveness. For more details, see European Commission (2010), European Competitiveness Report 2010, COMMISSION Staff Working Document, SEC(2010) 1276 final available at http://ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=6222. See footnote 6. Note that the real wage in this section is measured as the nominal compensation per employee deflated by the GDP deflator. In the previous sub-section wages and salaries were deflated by the harmonised consumer price index as this variable measures best the evolution in household purchasing power. "Chapter 5, The labour income share in the European Union" available at ec.europa.eu/social/BlobServlet?docId=3068&langId=en.

v vi

vii viii

ix x xi

22

Sectoral trends
Industrial output edged up slightly in April and remains significantly higher than a year ago Economic recovery in the EU has been underpinned by improvements in industrial production since mid-2009. After picking up over the second half of 2009, industrial output broadly continued to increase in 2010. In April 2011 compared with March 2011, seasonally adjusted industrial production grew by 0.1 % in the EU (see Chart 19). In March production had fallen by 0.2 % on the month. In annual terms, industrial production increased by 4.7 % from April 2010 to April 2011. However, it is still well below the peak recorded in 2008. The slight improvement in industrial production at EU level in April 2011 reflected higher output in durable consumer goods (+0.7 % on March 2011) and modest increases in capital goods and nondurable goods (both +0.1 %), but also a decrease in energy (-3.0 %) and intermediate goods (-0.1 %). In April, a significant progress was noted in Latvia (+3.4 % on the month), Denmark (+2.8 %), Malta (+2.2 %), Luxembourg and Slovakia (+1.6 %), whereas major declines were recorded in Portugal (-3.6 %), Greece (-3.5 %), Slovenia (3.1 %) and the United Kingdom (-1.6 %).
Chart 19: Industrial production in the EU

the last two years. After falling by 8.4 % between the first quarter of 2008 and the first quarter of 2010, it has stabilised and has even risen by 0.2 % between the first quarter of 2010 and the first quarter of this year. This slight improvement was driven by rises in Estonia (+15.5 %), Lithuania (+5.9 %), Latvia (+4.4 %), Poland (+3.7 %) and Austria (+2.9 %), while employment still receded in Greece (-9.1 %), Bulgaria (-5.8 %) and Finland (-2.8 %). and new orders for industry slightly increasing New orders in the EU increased by 0.2 % in April, after a decrease of 1.7 % in March. Excluding ships, railway and aerospace equipment, for which changes tend to be more volatile, new industrial orders decreased by 0.6 % in April (see Chart 20). Comparing April 2011 with April 2010, new industrial orders grew by 6.9 %, while total industry, excluding ships, railway and aerospace equipment, rose by 6 %. Total manufacturing work on orders rose in the majority of the Member States for which data are available. The highest increases were recorded in Estonia (53.2 %), Finland (28.8 %) and Lithuania (21.1 %). Denmark (-2.5 %), Hungary (-2 %) Poland (-2.4) and the UK (-2.8) registered a decrease over the year.
Chart 20: New industrial orders for the EU

Year-on-year growth in EU industrial production, which turned positive in the beginning of 2010 and has since remained so, although at a slower pace over recent months, was 4.7 % in April 2011, against 5.1 % in March. This year-on-year growth is mainly driven by increases in capital goods (+9.5 %), intermediate goods (+5.5 %), nondurable and durable consumer goods (+3.4 and +2.8 % respectively), while the production of energy fell by 4.7 %. The employment situation is more mixed. Although the decline in the number of persons employed seems to be easing in comparison to

The construction industry receded in April, while posting a lower production than a year ago Although industry has recovered for more than a year now, production in the construction sector has not yet really picked up following roughly three years of deterioration, with only three months of revival observed in 2010. In the construction sector, seasonally adjusted production fell by 0.9 % in the EU in April 2011, compared with the previous month, after increasing during the two previous months (+2.3 % in March, Chart 21).

23

The result for April reflected mixed performances across the Member States for which data are available. Construction output fell in eight and rose in Sweden (+1.6 %), France (+0.7 %) and Poland (+0.5 %). The largest decreases were registered in the United Kingdom (-13.4 %), Germany (-5.7 %) and Portugal (-4.0 %). The sector's annual growth has been steadily in negative territory for three years, except in mid2010, and is currently supported by expanding civil engineering activities. Between April 2010 and April 2011, construction output as a whole dropped by 1.2 % in the EU.
Chart 21: Construction production for the EU

Year-on-year growth in turnover was 1.9 % in April. Among the Member States for which data are available, total retail trade rose in thirteen and decreased in six.
Chart 22: Retail trade turnover in the EU

Employment in the retail trade sector can therefore be expected to benefit from this recovery. Between 2008 and 2009, it shrunk by 1.5 % due to the recession. Euro area sentiment slips to five-month low As indicated by the Markit8 composite purchasing managers index (PMI), the recovery in the euro area decreased once again in May to a five-month low. The final Markit PMI decreased to 55.8 in May, down from 57.8 in April, with only Germany and France recording some expansion. Employment continued to rise in May, with the rate of jobs growth only marginally below Februarys three-year peak and above the earlier flash estimate. Rates of output expansion eased in both manufacturing and services. The slowing was much more pronounced in manufacturing, where production rose at the weakest pace in seven months. Manufacturers indicated that slower inflows of new orders and continuing disruption to supply chains following the earthquake in Japan had led to a cooling of production growth. The easing of business activity in the services sector to a four-month low was much less marked, meaning that the service sector outpaced manufacturing for the first time since last September. Rates of growth eased in all the MS where PMI data for both manufacturing and services are available. The expansion also remained twospeed, with France and Germany leading the recovery. By contrast, Italy, Spain and Ireland drifted closer to stagnation.

Employment figures are still on the decline in annual terms, as they have been since the peak of the first quarter of 2008, and since the break posted in the second quarter of 2010 (+0.7 % on the quarter), the fall has been steady. In the year until the first quarter of 2011, employment in the construction sector fell by 2.2 %. In three years, the sector lost 11.1 % of its workforce in the EU. The impact of the crisis has been particularly dramatic in Ireland (-56.9 % in three years), the three Baltic States (-47 to -48 %), Spain (-42 %), Greece (-29.4 %)and Bulgaria (-29.1 %). Only a few countries exhibit positive trends in the same period: Poland (+7.5 %), Germany (+2.4 %) and Belgium (+1.1 %). while retail trade turnover increased in April Compared with the sizeable falls in output seen in industry and construction, retail trade turnover in the EU held up fairly well at the height of the crisis between autumn 2008 and spring 2009 and has evolved more slowly since then, although monthly changes have always been quite volatile. Retail increased by 1.1 % in April (see Chart 22). Underlying the April result for the EU was a good performance among Member States: total retail trade increased in France (up by 1.4 %), Germany (0.6 %), Poland (0.4 %) and the UK (1.1 %).

24

SPECIAL FOCUS: VOLUNTEERING

2011 is the European Year of Volunteering and this special focus reports on recent developments in the volunteering sector. Nearly one-fifth of the EU population is engaged in some form of voluntary work, which accounts for up to 3 - 4 % of some EU countries GDP. In the EU, the term volunteering is commonly used to refer to all forms of voluntary activity, whether formal or informal. People who undertake such activity do so of their own free will and for their own personal reasons, without concern for financial gain. How important is volunteering to the economy? According to the Volunteering in the European Union report,1 some 92 to 94 million adults (or 22 % to 23 % of the EU population) are involved in volunteering, while some key European and international surveys indicate that there are around 100 to 150 million volunteers in Europe. The gender balance of volunteers varies considerably from one country to another. However, eleven EU countries have a greater number of male volunteers, while nine EU countries have equal numbers of men and women volunteering. The predominance of male volunteers in some countries is due to the fact that the sports sector attracts the highest number of volunteers, and more men than women tend to volunteer in that sector. In just five EU countries there are more female than male volunteers. Besides, a positive correlation has been demonstrated between the level of volunteering and educational attainment. In most EU countries, employees are the most active volunteers and there is a strong and positive correlation between employment and propensity to volunteer. The economic value of volunteering also varies greatly from country to country. It accounts for only a tiny percentage of GDP (less than 0.1 %) in Slovakia, Poland and Greece but has a much bigger share in Austria (4.75 %), the Netherlands (3.50 %) and Sweden (3.14 %). Volunteering also represents more than 2 % of GDP in the UK, Finland and Denmark. Countries such as Germany (1.95 %), France (1.65 %)and Ireland (1.79 %) are among six countries in the middle range, where volunteering represents between 1 and 2 % of GDP. Finally, in Bulgaria, the Czech Republic, Italy, Hungary, Lithuania, Malta, Portugal, Romania and Slovenia, the value of volunteering is between 0.1 % and 1 % of GDP. In 2010, according to a Eurobarometer survey,2 30 % of Europeans were actively involved in voluntary work in one or more organisations. Their work is quite varied, as are the associations they work for. More than a third of the volunteers are active in a sports club or association, while 22 % are involved with a cultural, educational or artistic association. Some 17 % do voluntary work for a charitable or social aid organisation, 16 % take part in a religious organisation and 13 % are active members of a trade union. Lower down the list, 9 % are working for an environmental organisation and 8 % for a leisure association for the elderly, a business or professional organisation or a political party. In the Netherlands, most of the people surveyed (54 %) do voluntary work. The situation is similar in Denmark (52 %) and Sweden (52 %). In Greece, by contrast, 87 % of the people surveyed do no voluntary work at all, and the situation is similar in Portugal (86 %), Bulgaria (86 %), Cyprus (80 %), Lithuania (80 %), Malta (79 %) and Spain (78 %). The involvement of respondents is conditioned by their socio-demographic profile: volunteering is more widespread among the well-off and the most educated. It is undertaken by 43 % of those who studied until the age of 20 or beyond, 46 % of managers, 40 % of those who place themselves at the top of the social scale and 45 % of those who are very interested in politics. By contrast, voluntary work is done by only 21 % of those who completed their studies at the age of 15 or earlier, 28 % of manual workers, 23 % of those who place themselves at the bottom of the social scale and 18 % of those who are not interested in politics. Age, however, is not a factor in volunteering: 31 % of those aged 15 to 24, 29 % of those aged 25 to 39, 34 % of the 4054 age group and 30 % of those aged 55 or over do voluntary work in an association or an organisation. Long term developments According to the Volunteering in the European Union report, trends in the level of volunteering over the past decade vary from one EU Member State to another, depending on the national context and situation. In the last ten years, however, there has been a general upward trend in the number of volunteers active in the EU. The increase has been significant in ten countries: Austria, Belgium, the Czech Republic, Denmark, France, Greece, Italy, Luxembourg, Poland and Spain. A further six countries have seen modest increases in the number of volunteers: Estonia, Finland, Germany, Hungary, Romania and Slovenia. The number of volunteers has remained stable or has fluctuated mildly in seven countries: Bulgaria, Ireland, Latvia, Lithuania, Malta, the Netherlands and Sweden. Only Slovakia reported a downward trend over the past decade. In the remaining such as the Czech Republic, Denmark and Spain, have noted that an increased public awareness of social and environmental concerns has led an increasing number of individuals to volunteer to make a difference.
1. GHK, February 2010. 2. Standard Eurobarometer No 73 Public Opinion in the European Union.

25

In a number of countries, such as Estonia, recent civic initiatives have promoted volunteering and have increased the number of individuals taking part in collective voluntary projects and events. Some countries like Denmark have pointed to the increased need for volunteers and voluntary labour in public sector and voluntary organisations, e.g. in nurseries, schools and care homes for the elderly. In France, more and more voluntary organisations are being created every year, and they attract new volunteers without affecting the number of volunteers already working with existing organisations. In some countries, notably Belgium, Denmark, Germany and Spain, older people are becoming more involved in volunteering. In other countries the public image of volunteering has been gradually changing. In Poland, for example, the main reason for the increasing number of volunteers is that people now take a more positive view of volunteering, such as seeing it as a valuable opportunity to gain work experience in the social or non-profit sector, for young people. In Slovakia, the only country to report a decrease in the number of volunteers, stakeholders have pointed to the governments failure to support the tertiary sector. Impact of the economic crisis The recent economic crisis has had a considerable impact on volunteering in a number of countries. In some, such as Ireland and the Netherlands, it has been seen as an opportunity and has led to an increased number of individuals participating in voluntary activities. According to Volunteer Centre Ireland (VCI), the recession has led to a dramatic rise in the number of people registering for voluntary work. Many local volunteer centres reported an increase of almost 80 % in the number of people registering in 2009 compared to 2008. Indeed, for much of 2009 the increase was more than 100 %, and in some months it was as high as 120 %. In the Netherlands, a survey of 220 voluntary centres (conducted by Movisie) found that, six months earlier, demand for work at a quarter of these centres increased sharply and now that share stands at 44 %. In some other countries, including Italy and a number of Eastern European countries such as Estonia, Latvia, Lithuania and Poland, the economic crisis has hit the voluntary sector hard. In Poland, for example, the number of volunteers fell sharply at the end of 2008, triggering a debate on the serious crisis in the social sector in Poland. Outlook There are divergent views about the future of volunteering. In Belgium, for example, the number of volunteers is expected to increase over the next few years. In Italy, by contrast, the ageing population and the lack of young people willing and able to volunteer raise concerns over the future of volunteering in that country. A report by van Hal et al (2004) on volunteering policies and partnerships in the EU suggests that the nature of voluntary work may be changing. Volunteers are now much more likely to undertake shorter and more project-based activities. Indeed, representatives from civil society organisations in the Netherlands have the impression that the emphasis of voluntary work is shifting towards short-term projects with well-defined tasks and objectives. The quantitative impact of volunteering seen as a bridge between non-work and paid work has been shown especially in the social, environment or cultural fields and volunteers have played a major role in identifying needs and creating new jobs. Given that volunteering has increased in the great majority of EU countries over the past decade, it seems that in most countries the main challenges concern changes in the nature of voluntary work, and a mismatch between the needs of voluntary organisations and the aspirations of the new generations of volunteers. The difficulty may not be recruitment as such but finding the right people with the right skills. Another issue concerns service substitution and job substitution. There is indeed a real concern in some Member States that some of the activities undertaken or services provided by volunteering ought really to be carried out by paid workers or by a professional service. The UK, for instance, has a long-standing tradition of volunteers helping deliver public services. Many voluntary organisations are involved, especially in contracting to deliver welfare services, and this involvement is likely to continue growing as part of the Big Society project. The key issue here is that the role of volunteers in delivering public services should complement or add value to the work done by paid staff, not replace it.

26

Impact of restructuring on employment

The European Restructuring Monitor (ERM) recorded a total of 255 cases of restructuring between 1 March 2011 and 31 May 20119. Announced job losses continued to outnumber announced job gains but the gap is narrowing These cases involved 59 548 announced job losses and 47,610 announced job gains. The member states with the largest announced job losses were France (11 630 jobs) and the United Kingdom (10,690 jobs) followed by Italy (5 271 jobs), Germany (4 910 jobs) and Spain (4 710 jobs).
Chart 23: Announced job losses and creation for the EU

Further losses have been announced at SonyEricsson, which announced 450 job cuts within sales and administration in Sweden, 400 jobs will be cut in Stockholm and 50 in Gothenburg. At the same time, the company has started to recruit around 250 engineers within research and development (R&D) due to an increased demand for 4G-technology. In transport manufacturing, French company Alstom Transport announced the loss of 700 jobs at its site in Salzgitter (Lower Saxony, Germany) and 400 job cuts at its Spanish plant located in Santa Perptua (Barcelona). Alstom's plan to reduce staff in Germany and Spain is part of a large restructuring programme affecting many countries and resulting in 4 000 job losses. More losses in the sector have been announced by ship producer Slovenske Lodenice Komarno, which announced the collective dismissal of 150 out of 670 workers by the end of September 2011; while leisure boat producer Rodman Polyships has announced that it intends to present a redundancy plan to the labour authorities (expediente de regulacon de empleo de extincin) which will affect 120 workers at its Spanish plant.
Chart 24: Announced job losses for selected Member States

Manufacturing and Transport and communications were the sectors most affected by announced restructuring job losses Between March and May 2011, manufacturing (20 529 jobs) and transport and communications (16 797) were the sectors the most affected by announced job losses. Since September 2008 these two sectors have recorded a total of 793 172 announced job losses, over half of total announced job losses. Other significantly affected sectors included public administration (7 022 jobs) and financial intermediation (3 716 jobs). In manufacturing, large job losses where announced in telecommunications manufacturing companies. Nokia has announced plans to cut up to 2 900 jobs in Finland, through dismissals and outsourcing. The announced job losses include 1 400 lay-offs and the transfer of 1 500 employees to software development firm Accenture. Nokia's cuts are linked to its declining market-share in smartphones and the resulting strategic partnership with Microsoft. Nokia announced also 700 job cuts in the UK as part of plans to reduce its global workforce by 4 000 employees within two years. The cuts will be mainly in research and development as well as in software divisions.

In the pharmaceutical manufacturing sector, pharmaceutical giant Pfizer has announced that it is to close its plant in Sandwich, UK, with the loss of 2,400 jobs. Other losses have been announced by giant Sanofi-Aventis which announced in March it is to reorganize its European operations and cut up to 700 jobs by reducing its number of European subsidiaries from 30 to 10. The restructuring will affect Portugal (140 job losses), Germany (277 job losses), Belgium (87 job losses) and the Netherlands (70 job losses). Plants in Spain, the Czech Republic, Hungary, Romania, Switzerland, Austria, and United Kingdom will be also affected. In March, Sanofi-Aventis announced its plans to cut a further 280 jobs in

27

marketing and sales in Germany, a spokesperson of the group stated that these job losses are not part of the European-wide restructuring plan. Further losses have been announced at Warner Chilcott, a worldwide pharmaceutical company, which announced a Europe-wide restructuring plan which will result in the loss of 500 jobs in Germany, France, Italy, Belgium, Netherlands and Switzerland. In Italy, the company is closing its Italian subsidiary (ex Procter Pharma), with the consequent loss of 151 jobs, while in Spain Warner Chilcott will dismiss 120 working in pharmaceutical sales. Takeda, the French subsidiary of the Japanese pharmaceutical group, announced its plan to cut 195 out of its 443 jobs (115 sales representatives and 25 from the head office) and not to fill 55 vacant positions. The workforce reduction is mainly due to a reduction in sales of 30 % within the last four years as well as the loss of some important patent protections. Further losses in the country have been announced by DMH-Negma, a subsidiary of the pharmaceutical Indian group Wockhardt, which announced its plans to lay off its 130 sales representatives. The company had been placed into compulsory liquidation on 25 March 2011.
Chart 25: Announced job losses by sector for the EU

public freight railway company, which will dismiss 1 100 out of 9 285 employees by the end of August 2011. Dismissals are attributed to recovery package adopted by the government to save the company before bankruptcy; the company is expected to be privatised in 2012. Other losses in the sector relate to restructuring announcements in airline companies, Czech airlines SA announced 317 job losses in March 2011, while Spanair announced 50 job losses. Job losses continue to be recorded in the public administration sector. In April, the Catalan Government (Generalitat) announced it will dismiss 1 000 employees working in its public enterprises. This measure is included in the Catalan Government's plan to cut the public deficit and will affect public enterprises, entities and foundations where the Catalan Government has more than 50 % of ownership. According to this cost savings plan, the Government is to reduce 6 % of the total wages or dismissing 5 % of the staff employed in its enterprises before June 30th. The direct dismissals will affect 1 000 employees, while other measures include working time reduction and non-renewal of temporary contracts. The Slovak Customs Administration has completed a first wave of dismissal in March 2011, dismissing 800 employees, and it plans to dismiss another 200 employees by the end of April 2011. The job cuts are attributed to the implementation of the UNITAS programme promoted by the Ministry of Finance which envisages the merger of tax and custom offices with the aim of decreasing public expenditures. Further losses have been announced at DAK, the second largest public health insurer in Germany, which plans to cut 800 jobs in 2011, while the Austrian Government of Styria plans to cut 700 of its 8 500 public service posts by the end of 2015 due to the austerity plan. Between March and May 2011, the largest restructuring cases involving job loss were in: Manufacturing: Nokia (FI, 2 900 jobs), Pfizer (UK, 2 400 jobs). Catalan Public Administration: Government (Generalitat) (ES, 1 000 jobs), Coln riaditestvo (SK, 1 000 jobs). Transport and Communications: La Poste (FR, 10 000 jobs), Royal Mail (UK, 1 751 jobs) eleznice Slovenskej republiky (SR) (SK, 1 700 jobs), Cargo Slovakia (SK, 1 100 jobs). Real Estate/Business activities: In & Out (IT, 1 464 jobs), Nokia Denmark (DK, 950 jobs).

In the postal sector, the biggest case relates to French national postal operator La Poste which announced it will cut 10 000 jobs in 2011 after it had cut over 11 000 posts in 2010. Significant job losses in the sector were also announced at Royal Mail which announced plans to cut 1 751 jobs across the UK. The job losses include 1 000 managers across the UK and 751 employees in London where two postal sorting centres will be closed down. In the transport sector, eleznice Slovenskej republiky (SR), a Slovak public railway infrastructure company, announced it will dismiss 1 700 out of about 17 000 employees by the end of June 2011; dismissals are attributed to the implementation of the recovery plan approved by the government. Large losses in the country have also been announced at Cargo Slovakia, a

28

while manufacturing and real estate/business activities accounted for the majority of business expansion Of the 47 610 new jobs announced during MarchMay 2011, 18 315 new jobs were in manufacturing while 10 265 in real estate/ business activities and 10 110 new jobs in transport and communications; other significant job gains were in retail (5 929 jobs). The largest case of announced new jobs in the period relates to SNCF group, the French national rail company, which announced its plan to hire 8,000 employees by the end of 2011. Half of these new jobs will be based at the parent company and the other half at SNCF's private subsidiaries such as the local passenger transport company Keolis and the freight transport company Geodis. The parent company's workforce however, continues to diminish and the yearly balance of hiring and layoffs will be once again negative with more than 1 800 layoffs planned in 2011; at the same time, the upward trend with regards to employment levels continues in the private subsidiaries.
Chart 26: Announced job creation by sector for the EU

Germany. The company also stated that it will continue using temporary workers in order to react flexibly to market fluctuation. In the real estate and other business activities, global consultancy firms continue to announce the creation of several new jobs. Many of these were announced in France: Sopra group announced 1 600 new jobs, Steria 1 200 new jobs and Ausy 1 100 new jobs. Several job gains have been announced in the retail sector. The biggest case recorded relates to the announcement of retail group Sonae which is to open 60 new shops across Spain in 2011, resulting in more than 1 000 new jobs. In 2010, the group had already increased its presence in Spain with the opening of 46 new shops. Further job gains in the sector have been announced by large supermarket chains, such as Tesco, which announced it is to open new supermarkets in the Czech Republic and 25 new stores in Slovakia resulting in 900 and 600 new jobs respectively. 400 new jobs have been announced at Irish supermarket chain SuperValu, which will be opening two new stores and extending and refurbishing a further 34 existing stores as part of an investment programme worth more than 25m. Jumbo, part of the French retail group Auchan, announced it created 304 new jobs in April in Portimo (Algarve), while French supermarket chain Carrefour continues its expansion in Poland with the opening of its third supermarket in Gdask, employing 140 people and the opening of a supermarket in Opole employing 120 people. More new jobs have been announced by German retailer Kaufland which announced 150 new jobs in Romania following the opening of a new store in Oradea in June 2011 and 100 new jobs in Poland as a result of the opening of its store in Gorzw Wielkopolski. Between March and May, the biggest cases involving job gains were: Manufacturing: PSA Peugeot Citroen (FR, 4 000 jobs), Audi (DE 1 200 jobs), BMW (DE, 1 000 jobs), Mura in partnerji (SL, 920 jobs). Retail: Sonae (ES, 1,000 jobs), Tesco (CZ, 900 jobs). Real Estate/Business activities: Sopra Group (FR, 1 600 jobs), Steria (FR, 1 200 jobs), Ausy (FR, 1 100 jobs). Transport and Communications: SNCF (FR, 8 000 jobs), Amazon (DE, 1 000 jobs).

Between the second half of 2010 and the beginning of 2011, many car manufacturers have begun to recruit again. Between March and May 2011, French car maker PSA Peugeot-Citron unveiled plans to recruit 4 000 employees on permanent contract in 2011 across France; in addition, the company intends to take on a significant number of young people on apprenticeship and contrats en alternance (work/study training programmes). More new jobs have been announced at car manufacturer Audi which will recruit 1 200 new staff as well as 700 apprentices in 2011; the company stated it will also convert to standard contracts 300 temporary agency workers. Further new jobs have been announced in May by German automobile manufacturer BMW which will create 2 000 new jobs in 2011, 1 000 of which will be in

29

Recent social trends

Despite the stabilisation of the unemployment rate, long-term social risks are apparent. Longterm unemployment is high and had not yet clearly stabilised by the end of last year, bringing the risk of increased detachment from the labour market. Additionally, while the deterioration in the EU labour market has affected all segments of the population, the cumulative impact has been more pronounced for men than for women and it has been particularly severe on the most vulnerable groups, including young people, migrants and the low-skilled. Consequently, an increase in unemployment, long-term unemployment and inactivity has seriously aggravated the situation of vulnerable groups on the labour market and may make these groups particularly vulnerable to poverty. unchanged. The sharpest rises (around 2.5-4 pps) were in Ireland, Latvia Lithuania and Spain, while most other Member States recorded moderate rises. As a result, the long-term unemployment rate now varies more markedly across Member States, ranging from less than 1.5 % in Austria and the Netherlands to nearly 8 % or more in Ireland, Latvia, Lithuania, Slovakia and Spain (see Chart 28). However, like the unemployment rate, the long-term rate has also shown signs of stabilisation in most Member States, with the year-on-year increases slowing down.
Chart 27: Long-term unemployment rates in the EU by sex

Long-term unemployment and inactivity

The severe rise in unemployment in the EU had fed into long-term unemployment by the end of 2010 The longer-term effects of rising unemployment during the crisis have led to a sharp rise in longterm unemployment back to the levels observed in the early 2000s (see Chart 27). After bottoming out at 2.5 % in the second half of 2008 just before the crisis hit, the long-term unemployment rate in the EU rose sharply over the second half of 2009 and the first half of 2010. At 4.0 % in the fourth quarter of 2010, it was up by 1.5 pps compared to the fourth quarter of 2008. Whilst inflows into unemployment have stabilised last year, the share of long-term unemployed in total unemployment has increased to around 40 %, up from one-third two years before. but the increase in long-term unemployment has been slowing down However, like the overall unemployment rate, the long-term rate has also shown recently signs of stabilising, with the year-on-year increases slowing down from 1 pp in the first half of 2010 to 0.7 pp in the fourth quarter of 2010. Recent trends and the situation with long-term unemployment vary across Member States Almost all Member States registered an increase in long-term unemployment over the year to the fourth quarter of 2010, the only exceptions being Germany and Malta where the rate actually fell by 0.2 pp, and Austria where it remained
Chart 28: Long-term unemployment rates in 2009q4 and 2010q4

and the consequences unemployment may be severe

of

long-term

In line with the impact of increased unemployment, the increased risk of long-term unemployment may have more severe effects on the most vulnerable groups, including young people, migrants and the low-skilled (see the following sections on youth and vulnerable groups). Long-term unemployment may result in serious problems for both the individuals affected and the overall economy. The negative effects in terms of loss of human capital and thus on future employability, career prospects and earnings can be significant. Moreover, long-term unemployment may often lead to eventual exit from the labour market.

30

Unlike unemployment, the activity rate has been stable in the EU during and after the crisis So far, however, the difficult labour market conditions, which increased unemployment, have not reduced activity in the EU as a whole. At EU level, the average activity rate has remained broadly unchanged since the crisis began, fluctuating marginally around the 71 % level. It has also remained very stable over recent quarters, while long-term unemployment has picked up. However, this stability masks rather contrasting developments in activity rates across the Member States and for specific subpopulations (see the following sections on youth and vulnerable groups). but the situation in activity varies across Member States Most Member States registered increased or stable activity over the two years to the fourth quarter of 2010, however in some it declined. The highest rise (around 1.5 pps or more) was in Luxembourg, Lithuania, Malta and Poland. In contrast, a significant decline (by 1.2 pps or more) was recorded in Bulgaria, Estonia, Denmark, Finland, Ireland, Latvia and the Netherlands. Due to the impact of the crisis, the activity rate varies significantly across Member States, ranging from nearly 80 % in Denmark, the Netherlands and Sweden to just above 60 % in Hungary, Italy, Malta and Romania.

Chart 29: Changes in EU unemployment by sex

while the EU unemployment rate, which has recently been higher for women than for men, has broadly stabilised Continuing the pattern already established since mid-2010, the unemployment rate for both women and men had remained stable at the beginning of this year, while in April it decreased to 9.5 % for women and to 9.3 % for men (see Chart 30). Compared to a year earlier, the rate for women in April 2011 was for the first time marginally down by 0.1 pp, while that for men was down by a more significant 0.5 pp (coincidentally on its peak of 9.8 % in April 2010), reflecting a faster recovery of the labour market for men during the last year. Consequently the gender gap in the unemployment rate, which had been a fairly constant feature of the European labour market in favour of men until the crisis hit in 2008, and then of women until mid-2010, presently remains, at 0.2 pp, slightly in favour of men again.
Chart 30: Unemployment rates for the EU by sex

The gender perspective

Unemployment in the EU both for women and for men has been declining since last autumn, The last months of 2010 and the beginning of this year have seen a consistent fall in overall unemployment, driven by larger declines in joblessness among men than among women. During the first four months of 2011, unemployment for men declined by around 270 000 and that for women only by around 110 000 (see Chart 29). Compared to a year earlier, in April 2011 female unemployment was down by a mere 30 000 while male unemployment was down by around 670 000. This reflects the fact that, although initially the crisis had a much more pronounced impact on sectors employing mainly men, such as construction and industry, it appears that those sectors began to recover faster, whereas more female-oriented ones continued to be affected by declining employment until autumn last year.

There are still divergent trends in activity rates between women and men Recent trends in the activity of women and men have continued to diverge somewhat. While women have continued to slightly increase their participation in the labour market to 64.6 % at the end of 2010, the participation rate for men has

31

been more stable, with their activity rate, at 77.6 %, remaining unchanged on a year to the fourth quarter of 2010 (see Chart 37 in the section on vulnerable groups). Overall, the effects of the crisis remain more pronounced for men than for women Despite the relative stability in unemployment since early 2010, the strong initial rise in unemployment in the first two years of the crisis still means that there are around 2.5 million more women and 4.0 million more men in unemployment than in the pre-crisis trough of March 2008. Overall, men still account for 60 % of the total increase in unemployment since March 2008. Consequently, the unemployment rate for men remains sharply up (by 3.1 pps) on its low of 6.2 % in March 2008 (but down by 0.5 pp on its peak at the beginning of 2010), whereas the rate for women has risen by a more limited 2.1 pps from its low of 7.4 % (down by 0.2 pp on its peak in autumn last year). and the long-term unemployment equalised for women and men rates

men, while adult unemployment was down by just over 310 000 (see Chart 31).
Chart 31: Changes in EU unemployment for youth and adults

and the unemployment rate for youth in the EU has been edging down The youth unemployment rate declined by a significant 0.5 pp during the first four months of 2010 to 20.3 %, following a period of stabilisation or slight declines since its peak of 21.2 % at the beginning of 2010 when unemployment ceased its rapid rise (see Chart 32).
Chart 32: Youth unemployment rates for the EU by sex

More severe deterioration of the labour market for men than for women also resulted in a steeper increase in long-term unemployment among men (see Chart 38 in the section on vulnerable groups). While the long-term unemployment rate among women has continued to increase at the 0.6 pp rate year-onyear, the annual increase for men slowed down from a significant 1.2 pps in the second quarter to 0.8 pp in the fourth quarter of 2010. Overall, the long-term unemployment rate for women increased from its low of 2.7 % in the second half of 2008 to 3.9 % by the end of last year, while for men it picked up steeper from the low of 2.4 % to 4.0 %.

Chart 33: Youth unemployment rate changes to April 2011

The situation for young people

Unemployment in the EU among young people has been declining for more than a year The labour market for young people, as measured by unemployment, has been broadly improving since spring 2010, whereas unemployment among adults only started to consistently decline last autumn. During the first four months of 2011, youth unemployment declined by around 170 000 and adult unemployment by just above 200 000. Compared to a year earlier, youth unemployment was down by nearly 390 000 in April 2011, driven by a marked fall in unemployment among young

In April 2011 the unemployment rate for young people was 0.9 pp lower compared to a year earlier, accelerating the year-on-year decline observed in previous months. This improvement was driven by a decline (by 1.8 pps) in the rate

32

for young men, while the rate for young women was still slightly up by 0.1 pp, reflecting, as in the case of adults, a faster recovery of the labour market for men over the past year. Youth unemployment stabilised or declined in most Member States during recent months Despite overall improvements at EU level, there are signs of diverging trends across Member States with regard to recent developments in youth unemployment (see Chart 33). The youth unemployment rate has declined or remained unchanged during the three months to April in a majority of Member States, whereas it has continued to rise in ten Member States. Among the larger Member States, the rate has continued to rise in Spain (up 0.8 pp between January and April 2011) and in Poland (up 0.5 pp). On the other hand, the youth unemployment rate has continued to decline in Germany (down 0.7 pp between January and April 2011) and in France (down 0.9 pp) since its peak in the second half of 2009 and, after an earlier surge in youth unemployment in autumn last year, it eventually decreased in Italy (down 0.6 pp) and the UK (down 0.7 pp). Among the remaining Member States, Cyprus, Greece and Slovakia have recently seen sharp rises in their youth unemployment rates, in contrast Estonia recorded a very marked decline in youth unemployment in the first quarter of this year. and unemployment is lower than a year ago in most Member States In line with various developments across Member States during recent months, the rate of unemployment among youth is lower than a year ago in all but 11 Member States. In April 2011, Poland and Spain, among the larger Member States, recorded the highest year-on-year rises in the rate (up 2.0 pps and 3.5 pps respectively), while in Italy and the UK (over the year to February) the rate fell slightly, and it decreased noticeably in France and Germany (down 3.3 pps and 2.7 pps, respectively). Among the remaining Member States, the youth unemployment rate rose most steeply in Greece (up 8.2 pps over the year to the fourth quarter of 2010), and in Bulgaria and Portugal (up 5.3 pps in each). In contrast, in Malta, Latvia and Sweden, and especially in Estonia, the rate was much lower than in the spring of 2010. The participation of young people in the EU labour market has also been falling The activity of young people in the labour market have also continued to fall, although recently at

a slower pace (see Chart 39 in the section on vulnerable groups). The noticeable decline in the rate for young people during the crisis contrasts with developments in participation rates for other age groups, especially for older people, for whom the rate has increased year-on-year at a roughly similar pace as before the crisis. In the fourth quarter of 2010, the activity rate for young people was down by 0.4 pp, compared to a year earlier, (a decelerating decline compared to the year-on-year change of -1.0 pp observed in the last quarter of 2009), in contrast to a still firm rise of 0.7 pp for older people. The downward trend in activity for youth can only in part be explained by the young people participation in education or training. In recent quarters (when the activity rate has declined by 0.4 pp to around 1 pp year-on-year) the share of youth participating in education or training has risen marginally by around 0.1-0.3 pp year-onyear (to fluctuate around 66-67 % in non-summer quarters). However, the decline in the youth participation rates may partly result from, among others, due to discouragement. Indeed, the share of inactive youth who think that no work is available increased from 1.3 % in 2008 to 1.6 % in 2009 and to 1.8 % in 2010. On the other hand, the share of inactive youth because being in education and training, which is the main reason for inactivity, has remained broadly stable since 2005, at 87-88 %. The overall impact of the crisis on young people in the EU remains significant Despite the recent improvement, the marked deterioration in the labour market situation for young people during the crisis, reflecting in part their high exposure to temporary work contracts, has exacerbated the challenges of youth unemployment. At 5.0 million youth unemployment in the EU is still up by a quarter (1.0 million) compared to the low of spring 2008. This marked increase was driven initially by a very sharp rise in unemployment among young men, who, despite recent improvements, still account for 60 % (0.6 million) of the increase. However, since the beginning of 2010, it is young women who have borne the brunt of the increase; their unemployment level had risen by around 70 000 in 2010 before declining by around 50 000 in the first four months of this year, while that of young men had fallen by more than 350 000 since the beginning of 2010. and unemployment affects one in every five young people active in the EU labour market The youth unemployment rate has always been much higher than the adult rate, but the situation

33

of young people has become even worse as a result of the downturn. While the unemployment rate for adults, at 8.1 % in April 2011, remains 2.4 pps higher than its low of 5.7 % in early 2008, the rate for young people (currently 20.3 %) is very sharply up by 5.4 pps from a low of 14.9 %. This is all the more worrying as there is ample research evidence to suggest that a period in unemployment during early adulthood has lasting negative effects in terms of both future employment and wage prospects. Moreover, increased unemployment can heighten the risk of long-term unemployment or detachment from the labour market. and remains a major challenge in nearly all Member States The current labour market situation varies across Member States, and youth unemployment has become a serious challenge in several countries. The youth unemployment rate is now over 15 % in all but six countries (Austria, Denmark, Germany, Malta, the Netherlands and Slovenia) and is over 30 % in Greece, Ireland, Latvia, Lithuania and Slovakia, and nearly 45 % in Spain (see Chart 34). Long-term unemployment among young people remains a challenge in the EU, although the increase slowed down recently The increase in the long-term rate for young people during the crisis was more noticeable than for other age groups, however the increase has slowed down recently (see Chart 35 in the section on vulnerable groups). In the fourth quarter of 2010, the long-term unemployment rate for young people, was up by 0.9 pp compared to a year earlier, while it was 0.7 pp and 0.6 pp higher among adults and older people, respectively. Overall, the long-term unemployment rate for youth increased from its low of 3.6 % in the fourth quarter of 2008 to 6.1 % two years later. The 'Youth on the Move' Eurobarometer analysed issues of education, mobility and labour market... To help address the challenges of the EU labour market for youth, the flagship initiative Youth on the Move has been launched under the Europe 2020 strategy. The Flash Eurobarometer survey Youth on the Move (No 319b)10 has confirmed the role of vocational education and training, higher education and mobility for prospects on the future labour market. Moreover, it highlights the main concerns of young people in seeking employment and investigates their willingness to move to another country for employment or to set up a business.

Chart 34: Youth unemployment rates, April 2011

...pointing to the attractiveness of vocational training and higher education... Young people recognise the role of education and training in improving the prospects on the labour market. Most of them think that vocational education and training (78 %) and higher education (76 %) are attractive options for young people in their country. A majority think that vocational education and training (59 %) and higher education (53 %) would improve one's job opportunity, and also help obtain higher wage (38 % and 46 %, respectively). Additionally, acquiring practical skills (39 %) is an important outcome to undertake vocational education or training, while obtaining a higher level qualification (45 %) is a good reason to go into higher education. Mobility for the purpose of education and training is regarded as valuable for improving social and labour market skills. One in seven (14 %) young adults participating in the survey have gone abroad to learn, while one in five have done so for reasons other than education/training or vacation/tourism, including work (9 %), other educational purposes (5 %), volunteering (2 %) and other reasons (7 %). Those who have been abroad for educational purposes, alongside improved foreign language skills (57 %) and awareness of other cultures (40 %), also believe they have gained a ability to adapt to new situations (22 %), new professional skills (18 %), better interpersonal skills (17 %) and better opportunities for subsequent employment (16 %).

34

...but also highlighting concerns about current labour market for youth in the EU

the

Chart 35: Year-on-year changes in unemployment rates for the EU by population groups

While education and training and youth mobility appear attractive for youth, offering good prospects for integration in the labour market, young people are concerned about the current labour market. A slight majority (53 %) of respondents think that young job seekers are worried about the absence of jobs in their city or region. Many of them (42 %) mention the lack of good job opportunities in young peoples field of study, and the same number (42 %) state that jobs are poorly paid. At the same time, around 50 % of young adults would like to work in another European country, while 43 % would like to set up their own business in the future.

Due to the effect of the crisis, one active migrant from non-EU countries in five is unemployed The unemployment rate remains particularly high for non-EU nationals, although it has broadly stabilised in recent quarters. Despite having fallen during 2010 to just below 20 % in the fourth quarter, it remains well up (by around 6 pps) on the level recorded during 2007 and in the third quarter of 2008, just before the crisis hit the labour market. Indeed, the gap in the unemployment rate between non-EU nationals and EU nationals, which hovered around the 7-8 pps mark before the crisis, peaked at nearly 12 pps in the first quarter of 2010 and, although moderating over the following two quarters, it was still slightly above 10 pps at the end of last year. Since the crisis, foreigners from other EU Member States have also seen stronger rises in the unemployment rate than is the case for nationals, although to a lesser extent than non-EU nationals. In the two years to the fourth quarter of 2010, the unemployment rate for nationals of other Member States increased by around 3 pps, for nationals by 2 pps, and for non-EU nationals by a much stronger 4 pps (see Chart 36). and around 15 % of the active low-skilled persons in the EU are unemployed The unemployment rate for the low-skilled remains particularly high; even though, after picking up strongly at the end of 2008, there have been signs of some stabilisation. Despite this recent stabilisation, the unemployment rate for low-skilled - at around 16 % in the fourth quarter of last year - remains well up on the level of around 10-11 % recorded at the end of 2007 and in 2008, just before the crisis hit the labour market. Moreover, the gap in the unemployment rate between the low-skilled and the high-skilled widened to more than 10 pps in 2010. The lowskilled have experienced a far greater increase in their unemployment rate since the crisis first impacted on their labour market, with rates rising

Labour market developments for other vulnerable groups

Unemployment has started to stabilise for most of the population subgroups in the EU, Underlying the overall recent developments, the situation on the EU labour markets has stabilised for most population segments, including vulnerable groups other than youth, i.e. migrants and the low-skilled. Even if the unemployment rate had been on the rise up to the end of last year, the increase had become significantly lower than previously for all population segments, and some of the vulnerable groups may ultimately be doing no worse in comparison to other groups. The unemployment rate for third country migrants actually fell in the year to the last quarter of 2010, while for nationals and foreigners from EU Member States the rate was still higher than at the end of 2009. Also, it is the low-skilled who continue to suffer the sharpest rises in the unemployment rate, although rises have been much less pronounced than at the height of the crisis (see Chart 35). however the marked impact of the crisis on migrants and the low-skilled is still evident While the sharp deterioration in the EU labour market due to the recent financial and economic crisis has affected nearly all segments of the population, the cumulative impact is particularly severe on migrants and the lowskilled. High and rising levels of unemployment, long-term unemployment and inactivity may make these groups particularly vulnerable to poverty.

35

by around 3.5 pps over the two years to the fourth quarter of 2010 compared to rises of just above 2.2 pps and 1.3 pps for the medium- and high-skilled respectively (see Chart 37).
Chart 36: Unemployment rates for the EU by nationality

Long-term unemployment, though slowing down, remains a challenge for migrants and low-skilled In line with stabilisation of unemployment across subpopulation segments, the increase in the long-term unemployment rate started to slow down in the end of last year (see Chart 38). The long-term unemployment rate, severely deteriorated during the crisis, remains particularly high for non-EU nationals. Despite a more modest recent increase, it reached 8 % in the fourth quarter of 2010, nearly double compared to 4.8 % two years before. Since the crisis, foreigners from other EU Member States have also seen stronger rises in the long-term unemployment rate than is the case for nationals, however the recent increase has been similar in both groups of Europeans. In the two years to the fourth quarter of 2010, the long-term unemployment rate for nationals of other Member States increased by around 2 pps, for nationals by around 1.5 pps, and for non-EU nationals by more than 3 pps. Similarly, the long-term unemployment rate, worsened severely during the crisis, has remained particularly high for the low-skilled. Despite a more moderate increase recently, it reached 7.4 % in the fourth quarter of 2010. Since the crisis, the medium-skilled have also seen stronger rises in the long-term unemployment rate than is the case for the high-skilled. In the two years to the fourth quarter of 2010, the long-term unemployment rate for the low-skilled increased by 3 pps, for the medium-skilled by 1.2 pps, and for the high-skilled by more than 0.3 pp. Additionally, activity has changed to a different degree across population groups The overall stability in activity rates hides diverging developments not only for men and women and across different age groups (see sections on the gender dimension and on youth) but also across nationality groups (see Chart 39). Activity among nationals has remained broadly stable. The participation rate of foreigners from other EU countries, which started to fall year-onyear only in 2010, contrasts with that for migrants from non-EU countries, who had been leaving the labour market during the crisis, but started to increase their participation again by the end of 2010. Compared to a year earlier, in the fourth quarter of 2010, the activity rate remained unchanged for nationals, was down by 0.3 pp for other EU nationals, but rose by 0.3 pp for non-EU nationals. Nevertheless, the rate for third-country migrants is well below 70 %, while remaining 71 % for nationals and well above 75 % for those from other EU Member States.

Chart 37: Unemployment rates for the EU by education level

Chart 38: Year-on-year changes in long-term unemployment rates for the EU by population groups

Chart 39: Year-on-year changes in activity rates for the EU by population groups

36

SPECIAL FOCUS: THE IMPACT OF THE CRISIS ON THE RISK OF POVERTY OR EXCLUSION
In 2008 the EU was hit by the worst global recession for decades. The impact of this major crisis on economic growth and unemployment was felt almost immediately. But the social impact of the crisis, feeding through more indirect channels, is only beginning to appear. This focus provides a short overview based on the latest EU-SILC data covering the situation up to 2009. However, it has to be bear in mind that in all countries (except Ireland and the United Kingdom), 2009 SILC data for incomes and working activity refer to 2008, whereas 2009 deprivation data refer to the 2009 situation1. Overall, the share of people at risk of poverty or exclusion in the European Union was stable in 2009 compared with 2008, affecting almost one European in four. But this apparent stability masks diverging situations in different Member States. In 2009, poverty or risk of exclusion increased in several countries: Latvia, Hungary, Lithuania, Ireland, Estonia and Luxembourg (see Chart C.1). On the contrary, it fell in Poland. Chart C.1: Percentage at risk of poverty or exclusion in EU countries since 2005
% of the population
70 60 50 40 30 20 10 0
LV N M S1 2 EU 15 EE EU 27 IE R R O D E PT H U M T FR PL ES BE FI IT BG SE U K C Y D K N L LT LU SI C Z EA SK AT G

2005

2006

2007

2008

2009

Source: EU-SILC, Eurostat

The general picture is a result of several effects and needs to be broken down into the various dimensions of the risk of poverty or exclusion. At risk of poverty or exclusion is one of the key indicators provided under the Open Method of Coordination for combating poverty and social exclusion. It consists of three dimensions: people considered at-risk-of-poverty, materially deprived persons, and persons aged 0-59 in households with zero or very low work intensity. Looking at these three dimensions separately helps to show the social impact of the crisis. The at risk of poverty paradox The at-risk-of-poverty rate is defined as the percentage of people who live with a disposable income below 60 % of the median income of their country. It is the agreed headline indicator endorsed by the European Council in 2001 to measure poverty at EU level. The at-risk-of-poverty rate in EU27 has been stable for the five past years. This aggregate stability, however, hides marked differences across Member States. The at-risk-of-poverty rate decreased by 1.5 points in the United Kingdom between 2008 and 2009, whereas it increased by 1.5 points in Luxembourg in and 1.3 points in Denmark during the same period (see Chart C.2). However, these trends must be considered with caution. The risk of poverty depends on the poverty threshold, which is determined by the general level of income and its distribution in the whole population. This threshold may change from one year to another as individual incomes change. This is especially the case when an economic crisis occurs. The various types of revenue are not hit at the same time by the crisis. Work incomes are generally the first to decrease as the situation on the labour market get worse. But other incomes, such as pensions and social benefits, do not adjust immediately. As the highest incomes decrease while the others remain unchanged, the global income distribution changes. The median income and therefore the poverty threshold therefore get lower. People earning an income slightly below the poverty line may move above it although their situation has not changed or has even got worse. This was the case especially in the United Kingdom in 2009, with a 14 % fall in the threshold and an automatic reduction of poverty rates. It was also the case in Latvia between 2009 and 20102, with a decrease of 17 % of the poverty threshold leading to a 4.4 point reduction of the at risk of poverty rate.

37

Conversely, the poverty threshold has continued to rise in Bulgaria, Poland, Czech Republic, Slovakia, Baltic States, Romania, Slovenia and Hungary, but also in most of the Euro area to a lesser extent. However, in those countries, the poverty rate has remained unchanged. Chart C.2: Evolution of the poverty threshold and the at-risk-of-poverty rate in 2009 and 2008
% of the total population (at-risk-of-poverty rate) % (evolution of the poverty threshold)
35 30 25 20 15 10 5 0
27 EE FR BE SE M T BG ES LU PT PL EL LT SI IE FI E IT O U Y L K EU

-5 -10 -15 -20

SK

AT

LV

At risk of poverty rate 2008

At risk of poverty rate 2009

2008-2009 evolution of the poverty threshold

Note: The threshold variation is the annual variation of the poverty threshold between 2008 and 2009 in percent. Source: EU-SILC, Eurostat

Severe material deprivation reflects the crisis through economic strains. Severe material deprivation shows the population facing an enforced lack of at least four out of nine material deprivation items in the economic strain and durables categories3. This indicator is particularly responsive to the crisis for two reasons. First, the threshold defining the poor population is fixed and does not depend on the situation of the rest of the population, contrary to relative indicators such as the risk of poverty. Second, it provides more recent information than the other indicators (see below). Severe material deprivation decreased EU-wide by almost 3 points between 2005 and 2009, but the downward trend slowed after 2008. In Latvia, Hungary and Lithuania, severe material deprivation increased in 2009, breaking a 4-year downward trend (see Chart C.3). Chart C.3: Severe material deprivation rates between 2005 and 2009
% of the population

60

2005
50 40 30 20 10 0

2006

2007

2008

2009

AT

NMS12

MT

LV

CY

PT

LT

BG

RO

CZ

SK

EE

SI

IT

IE

BE

ES

FI

DE

UK

DK

SE

PL

EL

EU27

EU15

HU

NL

FR

Source: EU-SILC, Eurostat

Economic strain increases after 2008 in some new Member States, and in Portugal, Spain and Greece. Over and above the global stability of severe material deprivation, one part of the indicator is particularly responsive to the crisis. The economic strain factors capture the most immediate impact of the crisis on living conditions, whereas the durables correspond to long term purchases and might be less responsive.

LU

38

The share of the population claiming to have faced at least two deprivations on the list of five economic strains provides insight into the social impact of the crisis. This share suffering economic deprivation has increased with the crisis in some Member States. This is especially the case in the Baltic States, Ireland, Spain, Greece, Hungary and, to a lesser extent, Denmark and Luxembourg (see Chart C.4). In some Member States, such as the Baltic States, Spain, Greece and Denmark, this change breaks the trend towards a structural decrease in economic deprivation. In other Members States, such as Ireland and Hungary, it continues a previous increase in deprivation. Chart C.4: Evolution of deprivation in terms of economic strain between 2005-2008 and 2008-2009
In percentage points

LV EE

Increase in economic 10 deprivation between 2008-2009 8 6 4

DK 2 CZ BE LU HU

IE

ES EL

Decrease in economic deprivation between 2005-2008

-30 -20 -10

Increase in economic deprivation between 2005-2008

10 20 30 EU27 EU15 IT 0 SE DE 0 FR

PL SK

CY

-2 SI NL FI PT MT -4 -6
AT

Decrease in economic deprivation between 2008-2009

-8 -10

Note: Economic deprivation is defined as the share of the population facing at least 2 of the deprivations in the list of economic strains (keep the home warm, face unexpected expenses, eat meat or protein regularly, go on holiday at least one week a year). The evolution is the difference in points between the share of the deprived population at the end of the period and at the beginning. The United Kingdom, Bulgaria and Romania are not represented because some of the data are not available. Source: EU-SILC, Eurostat.

Some of the economic strains on the list of deprivations clearly illustrate the impact of the crisis on the population. This is especially the case for inability to face unexpected financial expenses and to pay utility bills. People unable to face unexpected expenses have become more numerous since 2008 in Hungary, Latvia, Lithuania, but also Ireland, Spain, Estonia, Denmark and Luxembourg (see Chart C.5). The share of people unable to pay utility bills also rose dramatically in 2008 and 2009 in Bulgaria, Romania, Hungary, Greece, Latvia, Slovenia, Poland, Cyprus, Slovakia, Ireland, Estonia and Lithuania (see Chart C.6). Part of this change is due to the rise in energy prices in 2009 in Eastern European countries. The share of people unable to afford a meal with meat or protein every second day increased by 7 pps in Bulgaria and 4pp Romania, which could be explained by strong rise in meat prices during that period, especially in Bulgaria. But a World Bank survey on household coping strategies during the crisis also highlights that 35% of households facing income losses in Bulgaria, and 60% in Romania reduced their food consumption to cope with the crisis4. Chart C.5: Deprivation in terms of economic strain: share of the population unable to face unexpected expenses
% of the population
90 80 70 60 50 40 30 20 10 0
P N L M S1 2 IE SK EU 27 D E EU 15 U K FI EE M T IT O FR PT U SI C Y EL BG ES BE LU LV H R C D AT N L SE LT Z K

2005

2006

2007

2008

2009

Source: EU-SILC, Eurostat.

39

Chart C.6: Deprivation in terms of economic strain: share of the population with arrears on utility bills
% of the population
40 35 30 25 20 15 10 5 0
IE SI M S1 2 EE EU 27 FI M T EU 15 IT FR EL PL PT O U BE ES SE LT E BG LU L N Y SK LV AT Z D K R H C C D U K

2005

2006

2007

2008

2009

Source: EU-SILC, Eurostat

The impact of the crisis on low work intensity households The low work intensity rate reflects the share of population aged 0-59 living in households where the working age members worked less than 20 % of their total work potential during the past year. The share of people living in a household with low work intensity strongly increased in 2009 in Ireland, the United Kingdom5, Lithuania, Estonia, Luxembourg, Sweden and Latvia (see Chart C.7). Conversely, the share of people living in a household with low work intensity decreased slightly in some countries, such as Germany, Hungary, Poland, Romania, Greece, Austria and Slovenia. However, as the 2009 data for activity status refer to the 2008 situation (the last full year preceding the survey), they only partially reflect the effect of the crisis. Only the 2010 data will therefore provide a fuller picture. Chart C.7: Low work intensity rates from 2005 to 2009
% of the population aged 0-59

25 2005 20 15 10 5 0 2006 2007 2008 2009

IE U K

FI R N O M S1 2 AT

D E EU 15 EU 27

IT D K M T

PT LV

FR

BE H U

EL LU

EE

PL

SI SK

SE C Z

ES

BG

LT

Source: EU-SILC, Eurostat

Notes: The annual income and low work intensity information in EU-SILC refer to the situation of the previous year. Data for United Kingdom and Ireland refer, however, to a slightly different concept, as the reference time period is the current year for the United Kingdom and the last twelve months for Ireland. Other SILC variables, such as material deprivation, are however referring to the current time period and do not suffer any delay. 2 2010 data are currently available only for Latvia. 3 Severe material deprivation provides a headcount of the number of people who cannot afford at least 4 of the following items: pay their rent, mortgage or utility bills (1), keep their home adequately warm (2), face unexpected expenses (3), eat meat or protein regularly (4), go on holiday (5), cannot afford to buy a television (6), a washing machine (7), a car (8) or a telephone (9). The five first items are the economic strains, whereas the last four are referred to as durables. 4 See: World Bank, The Jobs Crisis: Household and Government Responses to the Great Recession in Eastern Europe and Central Asia, 2011. 5 Low work intensity rates for Ireland and United Kingdom must however be interpreted with care, as they refer to a time period 6 months more recent than other countries and might therefore more greatly reflect the impact of the crisis.

C Y

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Latest developments in selected Member States

This section provides an overview of recent developments and forecasts at Member State level. This issue focuses on the situation on the labour market in Belgium, Denmark, Finland, Greece, Poland, Portugal, Slovenia, Spain and Sweden. Priority has been given to the most recent reports and forecasts (dating from April to June 2011) from reliable sources at country level, supplemented by relevant data from Eurostat. BELGIUM The Belgian labour market is recovering fast from the crisis, supported by recent improvements for employment in the private sector. According to the National Accounts Institute (NAI), economic activity was buoyant in Belgium in the first quarter of 2011, as real GDP rose by 1.1 % on the previous quarter and 3.0 % on the first quarter of 2010, recovering to its pre-crisis level. The Belgian labour market is recovering from the crisis with unexpected speed, thanks to particularly favourable conditions in recent quarters. The number of persons employed found by the Labour Force Survey increased by 68 000 units in 2010, up 1.5 % on 2009, while the number of unemployed rose by 26 300 units, up 6.9 %. In 2010, Belgium had 4.5 million workers and 406 000 unemployed. The employment rate stood at 62.0 %. Employment increased especially among paid employees in the private sector. Part-time work is also progressing: in 2010, over 44 % of employed women worked part time. Unemployment is rising especially among those over 50 years (+12.1 %) and those with low educational attainment. According to LFS data, Belgiums unemployment rate was 7.7 % in the first quarter of 2011, in seasonally-adjusted terms (7.8 % for women and 7.7 % for men), close to pre-crisis levels. Over the quarter, this is a decline of 0.3 pp. Compared to the first quarter of 2010, the fall amounts to 0.7 pp. Youth unemployment is easing somewhat too. In the first quarter of 2011 the unemployment rate for the young, aged less than 25, amounted to 21.2 %, i.e. down 0.3 pp on the previous quarter and down 2.5 pps on the first quarter of 2010. According to Eurociett, in March, the number of hours worked by temporary agency workers was +1.3 % higher than a month earlier. Activity increased in the blue collar segment by 2.1 %, and activity in the white collar segment went up by 0.1 %. In comparison with February 2010, activity in the temporary agency work industry grew by 19.3 % (compared to +17.6 % in January 2011). This result was driven by a rise both in the blue collar segment (hours worked: +27.0 %) and in the white collar segment (+9.3 %). The number of long-term unemployed increased sharply to 48.8 % of total unemployment in 2010, up 4.5 pps on the previous year and roughly 10 pps higher than the EU average. According to the National Bank Belgium, the Belgian economy, in Germanys wake, has succeeded in taking advantage of the revival in global demand, while private consumption has rapidly picked up thanks to the unexpected resilience of the labour market. GDP should be bolstered by several factors. Overall, that growth came to 2.1 % in 2010; it is projected to reach 2.6 % in 2011 before subsiding to 2.2 % in 2012, thus outpacing growth in the euro area. The continuing expansion of activity is likely to be supported by consolidation of the labour market. Job creation should be maintained at a level very slightly above the rates recorded in 2010, at 0.9 and 0.8 % respectively. Thus, in net terms, around 77 000 additional jobs will be created between the end of 2010 and the end of 2011, after a rise of 54 200 units during 2010. Taking account of the expected movement in the labour force, the decline in unemployment which had begun in early 2010 is expected to continue steadily, reducing the average unemployment rate from 8.4 % in 2010 to 7.3 % in 2012. This is partly confirmed by the Commissions spring 2011 economic forecasts. Due to the strong rebound in 2010 and very good growth prospects for the first quarter of this year (1 % q-oq), real GDP growth in 2011 and 2012 is expected to reach 2.4 % and 2.2 % respectively higher than the euro-area average. In both years growth is driven by domestic demand with a shifting composition. The impact of the economic recession on domestic employment was relatively contained. A temporary decline in hours worked thanks to the temporary unemployment schemes and labour productivity per hour acted as a buffer. Hours worked and productivity are expected to increase again. Employment started to rise again from 2010 onwards, faster than expected given the time it usually takes for the labour market to adjust after a crisis. Employment is expected to increase further in 2011 and 2012, by 0.8 % and 0.7 % respectively. As a consequence, the unemployment rate in 2010 rose less than expected (from 7.9 % in 2009 to 8.3 % in 2010), and will start decreasing again from 2011

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onwards. Although this short-run development is positive, the structure of the Belgian labour market increases the risk that in the longer term part of the cyclical rise in unemployment will become structural. DENMARK Amid an economic slowdown in the first quarter of 2011, Denmark's unemployment remained high. According to Danmarks Statistik, seasonallyadjusted GDP fell by 0.5 % in the first quarter of 2011, compared to the previous quarter, mostly driven by an overall decline in total gross fixed capital formation (-8.3 %), domestic demand and government consumption (both -0.8 %), counterbalanced by growth in exports (+4.3 %). Total employment fell by 0.1 % in the same period, equivalent to roughly 2 900 people. This decline is attributable to redundancies in the public sector (4 500 people), while market-related employment is estimated to have risen (+1 600 people). Denmarks unemployment has risen dramatically since the economic recession of 2008, as it more than doubled between the first quarter of 2008 and the same quarter in 2011. The unemployment rate then reached 8.2 %, against 3.4 % three years earlier. In seasonally-adjusted terms, it amounted to 7.5 %, virtually unchanged compared to the two previous quarters and 0.3 pp higher than a year earlier. The deterioration in unemployment figures is the consequence of a considerable increase in productivity after three years of decline. Productivity in industry rose between 2009 and 2010 by as much as 5.8 %. The increase was the largest since 1994 and twice as large as the average annual increase over the period 1967 to 2010 (2.9 %). The increase occurred as a result of economic growth of 2.2 % last year, and despite a decline in hours worked of 3.4 %. Long-term unemployment remains subdued, at roughly 19 % of total unemployment for the whole of 2010, i.e. the second lowest rate in the EU. However, it is double the rate of the previous year, due to a steady increase through 2010. The unemployment rate for women remained relatively stable from the fourth quarter of 2010 until the first quarter of this year, at 7.5 % (+0.1 pp). It is 1.7 pps higher than one year earlier though. Male unemployment, after peaking in the first half of 2010 (8.9 % in the second quarter of last year), is now easing, at 7.6 %, i.e. 0.2 pp below the previous quarter, and 0.8 pp down on the first quarter of 2010. The youth unemployment rate was 13.5 % in the first quarter of this year, equalling the level recorded a year earlier but

down 0.4 pp on the quarter. Youth unemployment nearly doubled during the crisis and appears to be enduring. According to Denmarks public employment service Arbejdsmarkedsstyrelsen, a significant decline in the number of job vacancies was seen between April 2009 and April 2011, down by 33 %, corresponding to 8 000 full-time jobs. This fall was driven by the following sectors: healthcare, educational, social and church work, cleaning, maintenance and renovation, academic work and agriculture. In the same period, though, there was a 61 % decline in the number of layoffs. The number of businesses announcing layoffs fell by 29 %. It should be noted that job vacancies are defined as the number of jobs published by employers on the public internet facility for jobseekers and employers in Denmark. It only represents a share of the total number of job vacancies in the Danish labour market According to the Commissions spring 2011 economic forecasts, Denmark, a small open economy, was hit hard by the financial and economic crisis, the impact of which was amplified by an ongoing domestic housing market correction, tensions in the financial sector and the necessary adjustment following a period of overheating in 2004-07. Consequently, output plunged by more than 8 % from peak to trough and has not yet recovered fully. The rebound of the Danish economy in 2010 was driven predominantly by fiscal stimulus measures, export growth and the turnaround in the inventory cycle. With fiscal support measures being phased out, GDP growth is expected to rely increasingly on the private sector, although the latter continues to face challenges stemming from the real estate sector and rising borrowing costs. Economic growth is thus projected to be moderate, at slightly below 1 % in 2011 and around 1 % in 2012. With productivity in Denmark having remained below the long term trend for a long period, the projected rise in corporate investment in the coming years will allow only a gradual increase in employment as companies are expected to boost productivity first. With the improvement in the labour market, students and others, who left the labour force in recent years, are expected to re-enter, thereby keeping the size of the labour force unchanged in spite of the ever stronger downward pressure coming from demographic changes. The fall in unemployment is therefore expected to continue at a slow pace. The unemployment rate, which was only 3.3 % in 2008, should stabilise around 7.1 % this year, before slowing down to 6.7 % in 2012.

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FINLAND The economic crisis has had a limited impact on Finland's employment, while job vacancies flourish across the country and unemployment recedes. According to preliminary data compiled by Statistics Finland, from January to March 2011 the volume of Finlands GDP increased by 0.8 % on the previous quarter. Compared to the first quarter of 2010, it grew by 5.8 %. This is one of the EUs best performances (EU average: +2.5 %). In the first quarter of 2011, Finlands total unemployment rate was 8.0 % in seasonallyadjusted terms, i.e. roughly the same as in the previous quarter, but 0.7 pp below the level recorded one year earlier. This downward trend was seen both for women and men although at different paces as, in the year to the first quarter of 2011, their unemployment rates fell by 0.3 pp to 7.5 % and by 1.0 pp to 8.5 %, leading to a reduction of the gender gap. As far as young people are concerned, the unemployment rate for Finns aged less than 25 was 20.5 % in the first quarter of 2011, down 0.2 pp on the previous quarter, and 1.9 pps below the level recorded in the first quarter of 2010. According to Statistics Finlands Labour Force Survey, the average number of employed people in 2010 was 2.1 million, which is almost the same as in 2009. Of them, 1.8 million had permanent contracts while 0.3 million had temporary contracts. The number of persons in permanent employment relationships was 22 000 lower and that of persons in temporary employment relationships was 19 000 higher than in 2009. According to the Employment Service Statistics, at the end of April the number of unemployed jobseekers registered at Employment and Economic Development Offices totalled 237 600, down 24 600 on the previous year, i.e. a 9.4 % fall. Compared with March, the number of unemployed jobseekers decreased by 10 000. The number of new vacancies reported during April totalled 46 900, up 17.3 % on the previous year. In all, the number of unfilled vacancies amounted to 98 000 in April, up 24.8 % on the year before. A total of 60 800 of these vacancies were filled during April, 13 900 of them through Employment and Economic Development Offices. At the end of April, unemployed jobseekers under 25 years of age numbered 26 800, representing a decrease of 5 700 (- 17.5 %) since April a year ago and a decrease of 1 600 (5.6 %) since March. According to the Commissions spring 2011 economic forecasts, in 2009, the trough of the

global economic crisis, the Finnish economy recorded one of the steepest falls in GDP in the euro area an unprecedented 8.2 % decline, driven by a sudden drop in exports. However, in line with the revival of global demand, the rebound has also been relatively rapid, with GDP expanding by 3.1 % in 2010. GDP growth was dampened in the first quarter of 2010 by a strike closing major Finnish seaports for an extended period. It picked up pace in the latter part of 2010, however, already reaching 5 % y-o-y in the fourth quarter. This will result in a strong carryover effect into 2011, when the growth rate is expected to exceed 5 % y-o-y in the first quarter, but moderating in the following quarters as the base effect fades. The year 2011 as a whole is forecast to record GDP growth of 3.7 %, well above the euro-area average. The growth difference with the EU average is forecast to narrow to 2.6 % in 2012, as GDP expansion in Finland is set to moderate to rates closer to its economic growth potential, which is depressed by the adverse demographic trends. The economic crisis has had a relatively limited impact on the labour market, as the unemployment rate increased by only about 2 pps, peaking at 8 % of the labour force in the course of 2010. However, as is usual in the Finnish labour market, the inactivity rate also rose since some population groups tend to exit the labour market during periods of weaker labour market prospects, opting instead for studies or domestic work. These trends are expected to reverse and the activity rate is set to increase in the forecast period. In the short term, this will offset the decline in the working-age population. However, in the medium term, the decline in working-age population will inevitably cut labour supply. Due to the retirement of a large baby-boom generation, the working-age population is projected to decline by about 140 000 people in 2010-20, representing over 5 % of the current labour force. After 2020, this demographic shift will level off. Labour shortages and wage pressures will probably increase in some sectors, even though unemployment is expected to remain relatively high due to existing labour market mismatches. GREECE Amid a persisting recession and in a context of fiscal consolidation, Greece's unemployment posted a new record high. According to the Hellenic Statistical Authority (ELSTAT), a total of 4.2 million people were employed in March 2011 (- 5.4 % on the year), while the number of unemployed amounted to roughly 811 000 (+ 40.2 % in the same period). The

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percentage of part-time employment is low and amounts to 6.5 % of the total number of the employed. The percentage of part-timers who choose to work part time because they cannot find a full-time job is 54.4 %, while 6.3 % choose a part-time job because they are looking after children or incapacitated adults. In the first quarter of 2011 the number of employed people reported by ELSTAT fell by 2.4 % compared with the previous quarter, and by 5.2 % compared with the first quarter of 2010, to reach 4.2 million people. In the same period, the unemployment rate was 15.9 % (i.e. 792 600 people), compared with 14.2 % in the previous quarter and 11.7 % in the corresponding quarter of 2010. The unemployment rate for females (19.5 %) is considerably higher than for males (13.3 %). Looking at the unemployment rate for different age groups, according to Eurostat's LFS data, the youth unemployment rate broke a new record in the fourth quarter of 2010, at 36.1 % in seasonally-adjusted terms, up 2.6 pps on the previous quarter and up 8.2 pps on the fourth quarter of 2009. For young females, the unemployment rate is even higher, at 42.8 %. Long-term unemployment reached 46.6 %. During the first quarter of 2011, 84 278 people who were unemployed one year before found a job, while 195 193 people who were working one year before lost their job during the same quarter. If we examine changes in employment by different sector of economic activity, we see that compared to the first quarter of 2010 there was a decrease in employment in all sectors. In the primary sector the decrease was 7.7 %, in the secondary 13.8 % and the tertiary sector 2.2 %. According to provisional data released by ELSTAT, in the first quarter of 2011, GDP at constant 2000 prices decreased by 5.5 % in comparison with the first quarter of 2010 and increased by 0.2 % in comparison with the fourth quarter of 2010. Total final consumption expenditure, depressed by ongoing austerity measures, recorded a decrease of 6.9 % in comparison with the first quarter of 2010, while gross fixed capital formation fell by 19.2 % in comparison. The external trade deficit narrowed by 40.7 %, as imports fell by 15.5 %, contributing positively to the GDP percent change. According to the Commissions spring 2011 economic forecasts, the recent downward revision of annual real GDP data for 2010 (by almost -0.3 pp to -4.5 %) will have an adverse impact on real GDP dynamics in 2011. Domestic demand remains weak, driven by income losses, the adjustment in the labour market and credit conditions. Underlying inflation, wage settlements

and unit labour costs are moderating, leading to improved competitiveness. The progressive rebalancing of the economy, supportive external demand and growth-friendly reforms are expected to move the economy back to its potential growth from 2013 onwards. The turning point for activity is estimated to be in the last quarter of 2010. For a third consecutive year, economic activity is set to decline. Real GDP is expected to further fall by 3.5 % in 2011 mainly due to heavy carryover effects coming from 2010 while growth is expected to turn positive only in the last quarters of the year or later, with the recovery gaining momentum after 2012. The contraction of economic activity, reflected in further weakening labour demand, is still weighing heavily on employment, which is set to fall throughout 2011. Reduced employment opportunities in the private sector, along with the recruitment freeze and cuts in short-term contracts in the public sector, will push the unemployment rate up to above 15 % through 2012. The situation in the labour market, combined with declining wages, should weigh on disposable income over the medium term, dampening real demand. As a result also of continuing tax uncertainty, private consumption is projected to contract further within the forecast horizon. POLAND Poland's economy, which has hardly experienced a recession over the past three years, saw a notable rise in unemployment during last year though, easing somewhat recently. According to the Central Statistical Office of Poland (GUS), compared to the same period of the previous year, the number of people in employment increased in the fourth quarter of 2010 by 0.8 %. Compared to the third quarter of 2010, unemployment rose by 1.4 %, while the male employment rate declined. The highest growth in unemployment was observed among 1524 year-olds. The number of unemployed people registered with the labour offices at the end of December 2010 amounted to roughly 2 million (of whom 1 million were women), up 142 000 or 7.8 % on the previous quarter, while compared to the same period of the previous year, it was 62 000 or 3.3 % higher. Compared to the end of the previous quarter, an increase in unemployment was observed among both men and women, +10.6 % and +5.4 % respectively. According to LFS data, Polands unemployment rate was 9.3 % in the first quarter of 2011 (9.6 % for women and 9.0 % for men, seasonally-adjusted). Over the quarter, this

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is a 0.3 pp decline, which benefited to women first (-0.4 pp). Compared to the first quarter of 2010, the fall amounts to 0.5 pp overall, although it remains 1.7 pps higher than in the first quarter of 2009 (7.6 %). Conversely, unemployment gained some ground for youth, as the unemployment rate for Poles aged less than 25 amounted to 25.1 %, i.e. up 1.0 pp on the previous quarter and 1.8 pps on the first quarter of 2010. On the positive side, longterm unemployment remains subdued compared to the EU average, at 31.3 % of total unemployment against an EU average of 39.9 % for 2010 and, according to Eurociett, Poland displayed strong growth in its temporary agency sector, with hours worked up by +37.8 % in the first quarter of 2011 when compared with the same quarter last year. In the fourth quarter of 2010 seasonally adjusted GDP was 0.8 % higher than in the previous quarter and 3.9 % higher than in the fourth quarter of 2009. The impact of total consumption expenditure amounted to 3.2 pps and gross capital formation to 2.4 pps (of which 0.3 pp was due to the impact of gross fixed capital formation and 2.1 pps the impact of changes in inventories). The negative impact of net exports on GDP growth was - 1.2 pps. According to the Commissions spring 2011 economic forecasts, in 2010, real GDP growth increased to 3.8 %, up from 1.7 % in 2009. Compared to the countries which experienced a severe recession in 2009 the rebound was subdued, but from a strong base. The level of real GDP in Poland has increased by 11 % since 2007, much more than in any other EU country. Real GDP growth in 2010 was driven by private consumption and restocking. Improving labour market prospects underpinned private consumption while rebounding external demand fuelled the domestic manufacturing sector and strengthened the turnaround in the inventory cycle. The recovery is set to broaden further with real GDP projected to increase by 4 % in 2011 and 3.7 % in 2012. The main growth drivers are a gradually improving labour market (in particular accelerating wages in the private sector), rebounding consumer and business confidence, a long-awaited increase in private investment on the back of high rates of capacity utilisation and improved profitability, and increased foreign capital inflows. After a moderate rise in 2009 (by 1.1 pps to 8.2 %), the unemployment rate increased further to 9.6 % in 2010 as labour supply increased owing, inter alia, to recent structural reforms. The sharper than anticipated downward adjustment of real wages

mitigated the effects of the slowdown on employment, which grew by 1 % in 2009-10. Employment growth is set to reach 1.1 % in 2011 and 1 % in 2012, as hiring is expected to remain muted due to the effect of labour hoarding during the crisis. This will result in unemployment falling to 8.8 % by the end of 2012. However, in the medium term, mounting demographic pressures will put a limit on the expansion of labour supply. Further reforms favouring dynamic employment creation and a longer working life will be needed to sustain a permanent recovery of domestic demand without undermining the competitiveness of the economy. PORTUGAL While the country's economic activity is declining further, unemployment is showing resilience, mostly owing to the surge in male and youth joblessness. In the first quarter of 2011, according to Statistics Portugal, the countrys GDP edged down by 0.6 % in real terms, compared with the same period of 2010. This reflects the strong negative contribution of domestic demand, due to the decline in final consumption expenditure and, to a lesser extent, investment. Conversely, the contribution of net external demand remained positive in the same period, reflecting strong growth in the export of goods and services and a fall in imports. Portuguese GDP also declined by 0.6 % compared with the fourth quarter of 2010. At the same time, the Labour Cost Index increased by 0.9 %, due to an increase in average labour costs (0.9 %) and a decrease in the number of hours actually worked. According to recent Labour Force Survey estimates, in the first quarter of this year the number of employed people was 4.9 million, while the number of unemployed people was close to 690 000. In the first quarter of this year, the unemployment rate was 12.4 % (12.9 % for women and 12.0 % for men, seasonally-adjusted), up 1.2 pps on the previous quarter and up 1.8 pps compared to the first quarter of 2010. It is nearly 5 pps higher than in the same quarter of 2008. This rise has been mostly driven by the surge in male unemployment, whose rate nearly doubled in that period. The youth unemployment rate was 27.4 %, up 5.5 pps on the previous quarter and 5.4 pps on the first quarter of 2010, and roughly 7 pps higher than the EU average. Long-term unemployment accounted for 53.0 % of total unemployment in the first quarter of 2011, and 29.3 % of these people had been seeking work for at least two years. In 2010, the average long-term unemployment rate was 52.3 %, i.e. 8.2 pps up on the percentage for 2009. This is the

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second highest rate in the EU, to Slovakia (64.1 % in 2010). According to the Commission's spring 2011 economic forecasts, Portugals GDP grew a rate of 1.3 % in 2010. This positive growth rate was, however, largely due to exceptional factors that boosted exports and private consumption. The latter particularly benefited from anticipatory effects of the VAT increase in July 2010 and January 2011. Notwithstanding the significant growth contribution of external trade, Portugal lost 0.9 % in export market share in 2010. Price and cost developments clearly showed that Portugal was not gaining competitiveness at a sufficiently fast rate to redress its current account deficit, which was high at 10 % of GDP last year. Similarly, fairly robust private consumption benefited from temporary factors, such as relatively low inflation due to falling energy prices. Moreover, at the end of last year, expectations of increases in indirect taxes led to some front-loading of expenditure. The weak overall economy and the steep increase in unemployment spilled over into large government deficits, which exceeded 10 % of GDP in 2009 and 9 % in 2010, up from 3.5 % in 2008. In a context of economic uncertainty and fiscal consolidation, unemployment is expected to rise further in the coming months: having reached 11.0 % in 2010 it is expected to increase to 12.3 % in 2011 and 13.0 % in 2012 SLOVENIA Supported by favourable economic conditions, Slovenia's labour market is improving, while job vacancies abound in the manufacturing sector. According to the Statistical Office of the Republic of Slovenia, in the first quarter of 2011 there were 928 000 persons in employment, 35 000 (or 3.6 %) less than in the previous quarter. In this context, employment figures fell again, by 0.6 % in comparison with the fourth quarter of 2010, i.e. a decline of 2.3 % on the year, while the EU average employment level remained relatively stable. The number of unemployed persons increased significantly for the second consecutive quarter. In the last quarter of 2010, 81 000 people were unemployed; in the first quarter of 2011 the number increased by 5 000, reaching 86 000. Thus the LFS unemployment rate also increased in comparison with the previous quarter from 7.8 % to 8.1 % (8.3 % for men and 7.8 % for women). As usual, the unemployment rate was highest among young persons, i.e. people in the age group 1524, although it is stabilising. It was 13.6 %, i.e. 0.7 pp lower than in the previous quarter and 0.1 pp higher than a year earlier. However, it still is well below the EU

average. Long-term unemployment accounted for 43.3 % of total unemployment in 2010, up 13.0 pps on 2009. In the first quarter of 2011, Statistics Slovenia reported on average 5 400 job vacancies and 782 000 occupied posts registered. The job vacancies rate remained the same as in the previous quarter, i.e. 0.7 %. Among employers with more than 10 employees it was 0.6 %. Compared to the previous quarter, the job vacancies rate increased the most in construction, where the rise was 0.3 pp. The reasons for this increase in the job vacancies rate in construction are the lower number of occupied posts (down by around 5 000) and the higher number of jobs on offer. The largest number of job vacancies, i.e. 1 200, was registered in manufacturing, which represents 21.9 % of all job vacancies covered by this survey. The demand for jobs was also more frequent in construction. On average there were around 800 job vacancies for which the application deadline had not run out. In annual terms, GDP increased by 2.1 % in the first quarter of 2011 (+0.3 % on the quarter). GDP growth thus remains at almost the same level of around 2 % for the fourth quarter in a row, with no substantial changes in the structure of economic growth. External trade continues to be the main driver, as exports of goods and services grew by 10.6 % compared to the first quarter of 2010 and thus slightly enhanced the growth dynamics compared to previous quarters. At the same time, however, imports also grew by 11.1 %. Consequently, the external trade balance curbed GDP growth slightly. Domestic demand in the first quarter of 2011 grew at a similar rate to the last quarter of 2010. Final consumption expenditure grew by 1.4 %, its lower growth reflecting reduced growth in spending by households, government and non-profit institutions. According to the Commissions spring 2011 economic forecasts, real GDP growth which resumed in 2010 (+1.2 %) after a serious recession in 2009 (8.1 %) is being driven by the continuation of the export-led recovery. Net exports are expected to account for half of real GDP growth in 2011, forecast at 1.9 %. In 2012, the recovery is expected to strengthen somewhat, reaching 2.5 %, with a weakening contribution from net exports more than compensated by strengthening contributions from domestic demand. Employment is expected to fall significantly again in 2011, due partly to carry-over from 2010, and to start improving only in 2012. Increased output

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is initially expected to raise labour productivity, with employment growth lagging. This represents a reversal of the employment dynamics during the downturn. The unemployment rate is expected to peak at 8.2 % in 2011 and to ease slightly in 2012, at 8.0 %. SPAIN The situation in Spain's labour market remains extremely difficult, with unemployment rates breaking new records and nearly half of the young being jobless. According to quarterly Spanish National Accounts, the Spanish economy grew by 0.8 % in the year to the first quarter of 2011, which is 0.2 pp higher than in the previous quarter. Quarteron-quarter growth stands at 0.3 %. The negative contribution of domestic demand to aggregate growth remains at 0.6 points this quarter, whereas external demand increases its contribution to quarterly GDP by up to two tenths, from 1.2 to 1.4 points. Employment fell by 1.4 % between the first quarter of 2010 and the first quarter of 2011 (-0.4 % decline during the first quarter of 2011 alone), meaning a net reduction of more than 240 000 full-time jobs in one year. However, the number of hours actually worked increased by 0.3 % over the same period. Spains LFS unemployment rate is still by far the highest in the EU. In the first quarter of this year, it remained as high as in the two previous quarters, at 20.5 %, in seasonally-adjusted terms. This is 1.2 pps higher than in the first quarter of 2010. Since the onset of the crisis, this rate has doubled, while the EU average rate rose by roughly 40 %. Youth and the male population are particularly hit, but the unemployment rate for women has proportionally been less affected. Before the crisis it was significantly higher than the male unemployment rate, but it now stands at 21.3 %, against 20.0 % for men. Three years earlier these figures were 11.4 % and 7.6 % respectively a much wider gender gap. Long-term unemployment in 2010 was lower than the EU average, at 36.6 % of total unemployment against 39.9 % for the EU as a whole. This is a rise of 13.0 pps compared to 2009. Youth unemployment is the highest Spain has ever seen, and is by far the highest in the EU. The unemployment rate for the young has been steadily rising in recent quarters, to peak at 44.0 % in the first quarter of 2011, up 1.0 pps on the previous quarter and 4.0 pps on the first quarter of 2010. This rate is also more than twice as high as it was in 2007 (17.6 % in early 2007). According to the Quarterly Labour Cost Survey, the labour cost of companies rose by 0.8 % in the

first quarter of 2011, as compared with the same period of 2010, standing at 2 487 euros. This is the first positive interannual rate after two consecutive quarters with negative variations. The wage cost per worker per month increased by 1.0 %, reaching 1 820 euros on average, while the labour cost per effective hour worked remained unchanged. According to the Commissions spring 2011 economic forecasts, the Spanish economy experienced a long-lasting housing and credit boom before the financial and economic crisis, which resulted in the build-up of large internal and external imbalances. On the back of strong domestic demand, GDP growth averaged over 3.5 % per year between 1995 and 2007 and was accompanied by robust job creation. A correction began in early 2007 and was accelerated by the international financial crisis. After seven quarters of negative growth, the economy started to stabilise in the course of 2010 (-3.7 % in 2009; -0.1 % in 2010), partly due to a positive impulse from world trade. The economic recovery is set to continue and GDP is expected to grow by 0.8 % and 1.5 % in 2011 and 2012 respectively. Initially, economic growth should be driven predominantly by external demand, while domestic demand is expected to take over this role by 2012, as also highlighted by the annual report of the Spanish central bank, stressing that the pick-up in domestic demand is conditional upon the level of private-sector debt and that this scenario is subject to great uncertainty and potential downside risks. High unemployment may adversely affect private consumption in the near future. The unemployment rate has passed 20 % and is expected to further increase in 2011 due to additional job shedding. Much uncertainty surrounds this Commission forecast, however, as the working population is being influenced by two opposing forces the discouraged worker effect (mostly young workers faced with very high unemployment) and the additional worker effect (mostly women entering the labour force, either as an additional earner or to compensate for a job loss in the household). The first signs of job creation are expected to appear no earlier than the end of 2011, in year-on-year terms, given the very gradual recovery in the private sector, driven to some extent by the positive spillovers from exporting firms, and continued wage moderation. Over the period covered by the forecast, wages are expected to remain historically low due to a wage cut followed by a wage freeze in the public sector, and relatively restrained wage growth in the private sector.

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SWEDEN Sweden entered a more mature phase of economic recovery, while the labour market continues to progressively improve, with sizable effects on unemployment. According to Statistics Sweden, the familiar picture of good Swedish economic growth with strong contributions from exports, inventory investments and gross fixed capital formation still holds true after the GDP results of the first quarter. However, signs of weakening within several areas of the economy indicate that it is on the way towards a more mature phase of the business cycle with more moderate rates of increase. GDP rose by 0.8 percent during the first quarter, seasonally adjusted and compared to the fourth quarter. This is a clear slowdown compared to the last three quarters, when the rates of increase were 1.6, 1.9 and 2.0 percent respectively, in seasonally adjusted terms. In this still favourable context, in April 2011, 4.6 million people had jobs, which is 120 000 more (both men and women) than in April last year. The employment rate rose by 1.2 pps to 65.7 % adjusted, the trend being positive for both men and women. The number of unemployed decreased by 76 000 to 396 000 over the same period. Gross pay increased overall by 5.7 % during the first quarter. Looking back to the 2008 2009 period, the active population is ageing. Employment increased by 18.0 % between 2008 and 2009 for the 65-67 age group, whereas overall employment decreased by 10.4 %. Since 2001, employment in this age group has increased by nearly 200 %, and their gross pay has risen by 15.6 percent. According to LFS, the unemployment rate was 7.7 % in the first quarter of this year in seasonallyadjusted terms, i.e. 0.2 pp down on the previous quarter and 1.0 pp below the first quarter of 2010. It has not yet returned to pre-crisis levels but this rate is significantly lower than the EU average. The relative decline benefits both men and women: in the twelve months to the first quarter of 2011 the male unemployment rate fell by 1.4 pps to 7.5 % and the female rate by 0.6 pps to 7.9 %. For young people the situation is less rosy. Nearly one in four Swedes (23.3 %) aged under 25 was unemployed in the first quarter of this year, although no recent rise has been recorded. This is 0.3 pps lower than in the previous quarter, and 3.0 pps below the peak recorded in the first quarter of 2010 (26.3 %). According to Eurociett, the first quarter of 2011 showed the second largest increase in turnover of the temporary agency work sector since measurements began. Turnover increased by

40 % compared with the first quarter of 2010, driven by all service areas except outplacement which decreased by 45 % compared with the same period last year. Outsourcing increased by 88 %, accounting for the most substantial increase. According to the Commissions spring 2011 economic forecasts, after the sharp recession of 2008-09 economic activity rebounded strongly in 2010, with real GDP growing by 5.5 % the fastest pace of expansion in four decades. This strong growth rate reflects the rapid turnaround in global trade, supportive fiscal and monetary policy and the resilience of private consumption. Leading indicators generally point to continued strength in the first half of 2011. While business and consumer confidence indicators seem to have levelled off, both remain high, pointing to considerable optimism among households and within the corporate sector. Industrial production and exports are also expanding, although new orders seem to be coming in at a somewhat slower pace in recent months. The recovery is expected to continue in 2011-12 (+4.2 % and +2.5 % expected, respectively), albeit at a more moderate pace than during 2010. Household consumption should expand at a respectable pace, supported by employment growth and a pick-up in real wage growth. The turnaround in the Swedish labour market occurred earlier and more vigorously this time than in previous recessions. This was mainly due to the relatively swift recovery of global growth and a sustained domestic demand. Unemployment, having climbed by over 3 pps to more than 9 % of the labour force during the recession, has already fallen back to 7.7 % in March 2011 (in seasonally-adjusted terms). Companies hiring plans also bode well for continued employment growth over the forecast horizon. The next collective bargaining round covering large swathes of the Swedish work force is due to start in the second half of 2011. With unemployment remaining well above its pre-crisis level, wage cost developments should generally remain under control. However, strong corporate profits and the rapidly improving employment outlook, coupled with the first signs of bottlenecks in some sectors, should lead to some wage acceleration in 2012. The unemployment rate is expected to decrease gradually to average around 7.6 % in 2011 and 7.2 % in 2012.

48

Outlook
Economic confidence in the EU is easing after one year of steady increase The EU Economic Sentiment Indicator (ESI) has generally been on an upward trend since April 2009, except for a short reverse last May. Recent progress has been appreciably slower than in 2009 and recently eased. The ESI reached a three-year high in March at 107.4 and eased in April and May to 105.4 (see Chart 40).
Chart 40: ESI and confidence for the EU

of present business situation in the UK, whereas it declined in the euro area (-0.7). Sentiment in construction remained broadly unchanged in the euro area (-0.3), while it improved slightly in the EU (+0.4), with the indicator remaining at very low levels in both regions. In the EU, employment expectations deteriorated in industry and improved in services, which can mainly be ascribed to the UK. In the euro area, employment expectations weakened both in industry and in services. Managers selling-price expectations declined in these two sectors, as well as consumers price expectations. Confidence among consumers increased in both the EU (+3.2) and the euro area (+1.8), reflecting more optimism about the future general economic situation and decreasing unemployment fears. Consumers were also more confident about their households' expected financial situation, especially in the EU. Confidence in financial services, whose indicator is not included in the ESI decreased in both the EU (-1.9) and, more markedly, in the euro area (3.6), mainly because of a weaker assessment of past and expected demand evolution. while the OECD leading indicators Europe point to loss of growth momentum for

This slow-down at EU level in May was due to lower optimism in four of the larger Member States: Germany (-0.1 points), Italy (-2.7 points), France (-1.9 points) and Spain (-0.9 points in April). The Netherlands also registered a marked decrease, down by 4.6 points. On the contrary, Poland registered a small increase (+0.5 points) as well as the UK (+2.6 points). The ESI is now above its long-term average in four out of the six larger Member States, with Spain still catching up and Italy recently decreasing. Although confidence remains far above its longterm average in the sector, industry contributed negatively to overall sentiment. Confidence in industry decreased by 1.7 points in both the EU and the euro area, on the back of a drop in firms' production expectations and a worsening assessment of the level of order books. Managers were also more pessimistic about their export order books and past production, which declined substantially, while their appraisal of stocks continued to recover from historic lows. Sentiment in services remained broadly unchanged in the EU (+0.3) and decreased in the euro area (-1.2). The difference between the two regions reflects managers' diverging views on expected demand, with an improvement in the EU and a deterioration in the euro area. Sentiment in the retail sector improved in the EU (+0.8), on the back of a very positive assessment

The OECDs Composite Leading Indicators (CLIs) for Europe, which started to pick up at the beginning of 2009, have exceeded their longterm average for a year now, although since last April 2010 they have levelled out. In April, the CLIs decreased in the euro area and in the four major European countries (France, Germany, Italy and the UK), thus losing momentum after a stabilisation in the middle of last year. Among the major European economies, all show a slowdown, but Germany is set on a stable path of expansion while France and Italy are lagging behind.
Chart 41: Composite leading indicator for the EU and the US

49

As these numbers are well above their long-term average, at 102.8 points, the recent slow-down underlines an easing economic expansion. The CLIs for the US gained 0.1 points in April to stand at 103.4 points, signalling steady expansion. Only US show a strong pick-up compared to last year while the Euro area is back to the level of last year (see Chart 41). Commission forecasts show a speed-up in the economic recovery but the outlook remains for a rather jobless recovery According to the European Commission's Spring Forecasts, the economic recovery in the EU continues to consolidate despite vulnerabilities in financial markets and an external environment that has become more challenging. As it is typically the case with recoveries from deep financial crises, the EU's recovery is expected to be more muted than in previous upturns, though as private domestic demand gradually strengthens, the recovery will become increasingly self-sustaining. In terms of annual averages, GDP growth is expected to edge up from just above 1.5 % in the euro area and 1.7 % in the EU this year to around 2 % in both regions in 2012 (see Chart 42). The 2011 figures are slightly higher than expected in the previous forecast of last autumn. However, the aggregate picture masks marked differences in developments across Member States. Some countries, in particular Germany, but also some smaller export-oriented economies, have registered a solid rebound in activity, while others, notably some peripheral countries, are lagging behind. It is expected that the pace of recovery within the EU will continue to vary.
Chart 42: Forecast for the GDP growth

expected for Greece, (15.6 %), Ireland (14.6 %), Portugal (13 %), Spain (20.2 %), Slovenia (8.2 %) and the UK (8 %). Employment is expected to grow, though at a slow rate: +0.4 % in 2011 and +0.7 % in 2012 (see Chart 43).
Chart 43: Forecast for the unemployment rate

Also for labour markets the situation is very uneven across Member States. Employment growth is most dynamic and delivering new jobs, in countries with strong growth and relatively flexible labour markets (see Chart 44). Unemployment is persisting in countries that are facing large structural adjustments associated with downward revisions of activity in construction and real estate as well as the financial sector. Fiscal adjustments in some Member States add risks to this employment outlook.
Chart 44: Forecast for employment growth

Concerning the labour market, the outlook remains for a rather jobless recovery. Unemployment is expected to decline by just 0.1 pp to 9.5 % over 2011 and then to 9.1 % over 2012. In 2011 increases in the unemployment rates are

50

Annex I: Selected statistics

Table 2: Real GDP growth
% change on previous quarter % change on previous year 2010 2011 2010 2011 q1 q2 q3 q4 q1 q1 q2 q3 q4 q1 0.1 1.1 0.4 0.5 1.1 1.6 2.8 1.9 2.3 3.2 BE 0.9 1.7 0.7 0.5 0.6 -4.8 1.0 0.3 3.1 1.5 BG 0.8 0.6 0.8 0.5 0.9 1.2 2.9 2.3 3.0 3.1 CZ 1.2 0.9 1.1 -0.2 -0.5 -0.7 2.5 3.5 3.0 1.1 DK 0.5 2.1 0.8 0.4 1.5 2.5 4.3 3.9 3.8 5.2 DE 0.8 2.2 1.2 2.5 2.4 -2.6 3.1 5.0 6.7 8.5 EE 1.7 -1.1 0.6 -1.6 : -1.3 -1.8 -0.3 -0.7 : IE -1.9 -1.3 -1.6 -2.8 0.8 0.7 -4.0 -4.8 -8.8 -7.7 GR 0.1 0.3 0.0 0.2 0.3 -1.4 0.2 0.0 0.6 0.7 ES 0.2 0.5 0.4 0.3 1.0 1.0 1.9 1.7 1.3 2.3 FR 0.6 0.5 0.3 0.1 0.1 1.0 1.8 1.3 1.2 1.0 IT 0.8 0.6 0.6 0.4 0.0 -0.8 0.6 1.9 2.5 1.8 CY 0.6 0.4 1.5 0.9 0.3 -6.1 -2.6 2.8 3.6 3.5 LV 1.3 1.0 0.3 1.8 3.5 -2.0 1.0 1.2 4.8 6.9 LT 0.3 1.4 1.1 1.7 : 0.9 5.3 3.3 4.7 : LU 1.1 0.1 0.8 0.5 0.7 0.1 1.0 1.7 1.9 2.5 HU 2.1 -0.3 0.5 1.2 0.7 3.7 2.9 2.4 3.6 2.3 MT 0.3 1.1 0.1 0.7 0.9 0.5 2.2 1.8 2.5 3.2 NL 0.2 0.8 1.2 1.0 0.9 0.2 2.4 2.6 3.2 4.2 AT 0.6 1.1 1.2 0.8 1.0 2.7 3.5 4.8 4.1 4.1 PL 0.9 0.4 0.3 -0.6 -0.6 1.7 1.6 1.0 1.0 : PT -0.2 0.2 -0.7 0.1 0.7 -2.2 -0.4 -2.2 -0.6 1.7 RO 0.1 0.9 0.3 0.5 0.3 -1.1 1.9 1.8 2.1 2.0 SI 0.8 0.8 0.9 0.9 1.0 4.7 4.2 3.8 3.5 3.5 SK 0.3 2.7 0.4 1.8 0.8 -0.5 4.7 3.1 5.5 5.5 FI 1.9 2.0 1.9 1.6 0.8 2.8 5.0 6.6 8.2 6.9 SE 0.2 1.1 0.7 -0.5 0.5 0.0 1.8 2.1 1.2 : UK 0.4 1.0 0.5 0.2 0.8 0.9 2.3 2.1 1.9 2.6 EU27 Source: Eurostat, national accounts.Seasonally adjusted and adjusted data by working days for change on previous quarter. Note: : not available

Table 3: Employment growth

% change on previous quarter % change on previous year 2010 2011 2010 2011 q1 q2 q3 q4 q1 q1 q2 q3 q4 q1 0.3 0.5 0.3 0.1 0.2 -0.2 0.5 1.1 1.2 1.1 BE -1.8 -1.2 -0.9 -0.8 -0.7 -7.3 -6.6 -5.2 -4.4 -3.5 BG -0.7 0.0 0.4 0.3 -0.1 -2.1 -1.0 -0.1 0.0 0.7 CZ 0.0 0.3 -0.5 -0.2 -0.1 -4.0 -2.3 -1.4 -0.5 -0.6 DK 0.0 0.4 0.3 0.3 0.3 -0.2 0.4 0.8 1.1 1.4 DE -2.2 0.2 0.5 2.2 3.3 -9.9 -5.6 -4.1 0.6 6.5 EE -1.1 -0.5 -1.1 -0.8 : -5.3 -4.1 -3.7 -3.4 : IE -0.5 -0.7 -0.7 -1.5 -2.2 -1.0 -1.8 -2.3 -3.3 -5.0 GR -0.3 0.0 -0.8 -0.3 -0.4 -3.7 -2.3 -1.7 -1.3 -1.4 ES 0.1 0.2 0.2 0.2 0.2 -0.6 0.1 0.5 0.7 0.8 FR 0.2 -0.2 -0.2 0.3 -0.6 -1.1 -1.2 -1.0 0.3 -0.7 IT : : : : : -1.1 -0.5 0.8 1.1 0.9 CY -1.2 1.0 1.5 0.2 0.2 -12.9 -6.7 0.1 1.6 3.0 LV -2.3 -0.1 0.5 0.7 0.5 -7.3 -6.7 -5.1 -1.2 1.0 LT 0.6 1.0 0.3 -0.1 : 0.7 1.7 2.0 2.0 : LU 0.2 0.7 0.4 0.4 -1.2 -2.2 -0.5 1.4 2.0 0.3 HU : : : : : 1.6 1.1 2.6 2.7 1.5 MT -0.1 0.1 0.0 0.4 0.0 -1.6 -0.6 -0.1 0.4 0.4 NL 0.3 0.3 0.3 0.6 0.3 0.2 0.8 1.2 1.7 1.6 AT -0.4 1.4 0.1 0.0 0.2 -1.0 0.7 0.8 1.1 2.0 PL -0.2 -0.6 -0.5 -0.5 -0.1 -1.7 -1.5 -1.2 -1.8 -1.6 PT : : : : : -1.4 -2.1 -1.9 -1.8 -2.7 RO -0.3 -0.3 -0.4 -0.9 -0.6 -2.8 -1.9 -1.3 -2.0 -2.3 SI -0.2 -0.2 0.6 0.3 1.5 -3.0 -2.3 -0.7 0.5 2.2 SK 0.4 0.4 0.2 0.0 0.3 -2.3 -0.4 0.5 0.8 0.8 FI : : : : : -0.5 0.8 1.8 2.4 2.8 SE -0.2 0.6 0.5 -0.2 0.4 -1.2 0.4 1.0 0.7 1.4 UK -0.1 0.2 0.1 0.1 0.0 -1.5 -0.6 -0.1 0.2 0.3 EU27 Source: Eurostat, national accounts.Seasonally adjusted and adjusted data by working days for change on previous quarter. Note: : not available

51

Table 4: Share of employees with temporary contracts

2011Q1 change on previous year (pps)

Table 5: Share of part-time employment

2011Q1 change on previous year (pps)

8.8 8.9 10.2 9.4 : : AT 8.0 7.5 8.3 8.7 : : BE 3.6 4.9 5.5 4.0 : : BG 12.5 14.5 13.6 13.4 : : CY 8.3 8.9 9.1 8.9 : : CZ 14.2 14.5 14.9 15.0 : : DE 8.0 8.6 9.0 8.6 8.7 0.1 DK 2.8 4.2 4.2 3.4 : : EE 24.4 24.9 25.6 24.8 24.8 0.0 ES 13.2 16.8 17.1 14.7 : : FI 14.3 15.3 15.7 15.1 : : FR 11.5 12.8 13.1 12.3 : : GR 8.7 9.8 10.4 9.8 : : HU 8.6 9.2 10.1 9.4 : : IE 12.0 12.9 12.9 13.2 : : IT 1.8 2.6 3.1 2.3 : : LT 5.3 6.6 9.1 7.3 : : LU 5.6 6.7 7.6 7.3 : : LV 5.1 5.0 6.5 6.1 : : MT 18.5 18.7 18.7 18.1 : : NL 26.0 27.1 28.2 27.7 : : PL 23.2 23.0 23.2 22.5 22.1 -0.4 PT 1.0 1.1 1.2 1.2 : : RO 14.1 16.2 17.3 15.5 15.0 -0.5 SE 16.8 17.8 17.8 16.6 : : SI 4.5 5.8 6.6 6.1 : : SK 5.7 6.2 6.3 6.2 : : UK 13.3 14.0 14.4 14.1 : : EU27 12.6 13.4 13.9 13.6 : : Men 14.7 15.0 14.6 : : Women 14.2 Source: Eurostat, EU LFS. Data non-seasonally adjusted. (from 15 to 74 years)

23.8 24.1 22.7 24.2 : : BE 2.2 2.2 2.0 2.2 : : BG 5.3 5.2 5.0 5.0 : : CZ 26.4 26.3 25.3 25.3 26.3 1.0 DK 25.5 25.7 25.4 25.2 : : DE 9.9 10.4 8.9 9.9 : : EE 21.5 21.6 21.9 22.7 : : IE 6.2 6.1 6.1 6.3 : : GR 13.2 13.4 12.7 13.3 14.0 0.7 ES 17.8 17.6 17.3 17.5 : : FR 14.8 14.8 14.5 15.1 : : IT 8.1 7.8 7.6 8.7 : : CY 10.7 8.9 8.3 9.5 : : LV 8.6 7.7 6.5 7.9 : : LT 18.8 17.8 16.5 16.8 : : LU 5.3 5.3 5.6 5.7 : : HU 12.1 11.1 11.8 11.4 : : MT 47.8 48.5 48.4 48.3 : : NL 24.5 24.5 24.0 24.1 : : AT 7.8 7.8 7.4 7.5 : : PL 8.4 8.5 8.2 8.5 10.6 2.1 PT 8.8 10.5 10.3 9.3 : : RO 10.2 10.5 10.4 9.9 : : SI 3.3 4.0 4.1 3.7 : : SK 14.4 13.6 12.9 14.5 : : FI 26.0 25.4 24.4 25.4 25.3 -0.1 SE 25.5 25.7 25.8 25.7 : : UK 18.6 18.7 18.4 18.6 : : EU27 7.7 7.9 7.9 7.9 : : Men 31.6 31.0 31.3 : : Women 31.6 Source: Eurostat, EU LFS. Data non-seasonally adjusted. (from 15 to 64 years)

2011Q1

2011Q1

2010q1

2010q2

2010q3

2010q4

2010q1

2010q2

2010q3

2010q4

52

Table 6: Employment rates 15-64

2011Q1 change on previous year (pps)

Table 7: Employment rates 20-64

2011Q1 change on previous year (pps)

61.9 61.5 62.0 62.7 : : BE 58.8 60.2 60.6 59.0 : : BG 64.1 64.9 65.4 65.5 : : CZ 73.0 74.1 73.8 72.9 72.2 -0.7 DK 70.2 71.0 71.5 71.7 : : DE 58.9 59.5 62.1 63.6 : : EE 59.7 60.4 60.3 59.4 : : IE 60.1 60.1 59.7 58.3 : : GR 58.3 58.6 58.9 58.4 57.7 -0.7 ES 63.6 64.2 64.4 63.7 : : FR 56.6 57.2 56.7 57.0 : : IT 68.8 69.8 70.0 70.1 : : CY 57.7 58.9 60.6 60.1 : : LV 56.8 56.7 58.5 59.2 : : LT 64.8 64.6 66.1 65.3 : : LU 54.5 55.3 56.0 55.8 : : HU 55.3 55.9 56.8 56.3 : : MT 74.2 74.7 74.9 74.9 : : NL 70.6 71.4 72.6 72.3 : : AT 58.2 59.3 60.0 59.6 : : PL 65.8 65.7 65.5 65.2 64.6 -0.6 PT 57.0 60.1 60.2 57.9 : : RO 66.3 66.5 66.3 65.7 : : SI 58.0 58.6 59.2 59.3 : : SK 66.5 69.2 69.3 67.6 : : FI 71.0 72.9 74.1 72.9 72.7 -0.2 SE 69.0 69.3 70.0 69.7 : : UK 63.5 64.3 64.6 64.2 : : EU27 69.3 70.2 70.7 70.2 : : Men 58.4 58.5 58.3 : : Women 57.8 Source: Eurostat, EU LFS. Data non-seasonally adjusted.

67.6 67.1 67.4 68.3 : : BE 64.6 65.9 66.4 64.7 : : BG 69.5 70.4 70.8 70.8 : : CZ 75.5 76.7 76.6 75.6 74.8 -0.8 DK 74.1 74.9 75.3 75.3 : : DE 64.4 65.0 67.9 69.5 : : EE 64.7 65.5 65.0 64.2 : : IE 64.5 64.6 64.1 62.7 : : GR 62.3 62.6 62.8 62.5 61.7 -0.8 ES 68.9 69.5 69.6 69.0 : : FR 60.8 61.5 60.9 61.2 : : IT 74.6 75.7 75.7 75.8 : : CY 63.2 64.7 66.3 65.8 : : LV 63.3 63.2 65.2 65.9 : : LT 70.3 70.1 71.6 70.7 : : LU 59.5 60.4 61.0 60.7 : : HU 59.5 59.5 60.4 60.4 : : MT 76.3 76.9 76.9 77.1 : : NL 73.7 75.0 75.5 75.3 : : AT 63.5 64.6 65.3 64.8 : : PL 70.8 70.5 70.4 70.2 69.5 -0.7 PT 61.6 64.8 64.6 62.3 : : RO 70.7 70.7 70.0 69.9 : : SI 64.0 64.5 65.0 65.1 : : SK 71.7 73.7 73.9 72.8 : : FI 77.3 78.9 79.7 79.1 78.9 -0.2 SE 73.2 73.4 74.0 73.7 : : UK 68.0 68.7 68.9 68.6 : : EU27 74.3 75.2 75.6 75.2 : : Men 62.3 62.3 62.1 : : Women 61.7 Source: Eurostat, EU LFS. Data non-seasonally adjusted.

2011Q1

2011Q1

2010q1

2010q2

2010q3

2010q1

2010q2

2010q3

2010q4

2010q4

53

Table 8: Unemployment rates

2011 Apr change on previous year (pps) 2011 Apr change on previous month (pps)

Table 9: Youth unemployment rates

2011 Apr change on previous year (pps) -0.6 2.0 0.2 -1.2 -1.2 : 1.1 : 1.1 -1.9 -0.1 : : : -0.8 1.3 -1.1 -1.5 0.5 1.4 5.6 : : 1.5 0.0 -0.8 : -0.5 -0.9 -0.2 2011 Apr change on previous month (pps) -0.1 -0.5 -0.2 -0.7 -0.2 : -0.2 : -0.1 -0.3 -0.1 : : : 0.6 -0.3 -0.3 0.0 -0.9 -0.1 -0.4 : : 0.3 0.0 -2.0 : -0.2 -0.3 -0.3

2010 Nov

2010 Dec

2010 Nov

2010 Dec

2011 Mar

2011 Mar

2010 Feb

2010 Feb

2011 Jan

2011 Jan

2010 Apr

2011 Apr

2010 Apr

8.5 8.0 7.9 7.8 7.7 BE 10.0 11.4 11.4 11.5 11.5 BG 7.4 7.0 7.2 7.0 7.0 CZ 7.5 7.7 7.6 7.6 7.5 DK 7.3 6.7 6.6 6.4 6.3 DE 17.9 14.5 14.5 13.8 13.8 EE 13.3 14.4 14.8 14.9 14.8 IE 12.2 14.1 14.1 : : GR 19.8 20.5 20.4 20.4 20.5 ES 9.8 9.6 9.6 9.6 9.5 FR 8.6 8.3 8.3 8.3 8.2 IT 6.4 6.9 6.9 7.0 7.2 CY 19.4 17.2 17.2 : : LV 18.3 17.3 17.3 : : LT 4.5 4.5 4.6 4.4 4.3 LU 11.3 11.1 11.3 12.1 11.9 HU 7.2 6.4 6.5 6.3 6.4 MT 4.5 4.4 4.3 4.3 4.3 NL 4.6 4.2 4.2 4.5 4.6 AT 9.7 9.6 9.5 9.4 9.3 PL 10.9 11.2 11.2 12.2 12.5 PT 7.1 7.4 7.4 : : RO 7.2 7.7 8.0 8.0 8.1 SI 14.5 14.1 14.0 14.0 14.0 SK 8.6 8.1 8.1 8.1 8.0 FI 9.1 7.8 7.8 7.8 7.6 SE 7.8 7.7 7.8 7.6 7.6 UK 9.7 9.6 9.5 9.5 9.5 EU27 9.8 9.5 9.5 9.5 9.4 Men 9.7 9.6 9.6 9.6 Women 9.6 Source: Eurostat, EU LFS. Seasonally adjusted Data Note: : not available

7.7 11.4 6.9 7.5 6.2 13.8 14.7 : 20.7 9.5 8.3 7.3 : : 4.3 11.8 6.3 4.2 4.4 9.3 12.6 : 8.1 14.0 8.0 7.7 : 9.5 9.4 9.6

7.7 11.4 6.8 7.2 6.1 : 14.7 : 20.7 9.4 8.1 7.6 : : 4.5 11.6 6.2 4.2 4.2 9.3 12.6 : 8.2 13.9 8.0 7.4 : 9.4 9.3 9.5

0.0 0.0 -0.1 -0.3 -0.1 : 0.0 : 0.0 -0.1 -0.2 0.3 : : 0.2 -0.2 -0.1 0.0 -0.2 0.0 0.0 : 0.1 -0.1 0.0 -0.3 : -0.1 -0.1 -0.1

-0.8 1.4 -0.6 -0.3 -1.2 : 1.4 : 0.9 -0.4 -0.5 1.2 : : 0.0 0.3 -1.0 -0.3 -0.4 -0.4 1.7 : 1.0 -0.6 -0.6 -1.7 : -0.3 -0.5 -0.1

21.6 21.4 21.3 23.7 21.1 BE 25.9 26.4 28.0 22.6 28.5 BG 17.2 17.2 17.3 19.1 17.5 CZ 13.9 13.4 13.6 12.9 13.3 DK 9.1 8.9 8.6 10.6 8.3 DE 25.9 25.9 20.4 36.6 20.4 EE 30.2 31.2 31.7 26.8 31.7 IE 36.1 36.1 : 31.9 : GR 43.1 43.2 43.6 40.9 44.0 ES 22.2 21.8 21.2 23.6 20.9 FR 28.6 28.4 29.1 28.7 28.2 IT 19.2 19.2 20.3 17.7 20.3 CY 31.0 31.0 : 34.2 : LV 34.1 34.1 : 36.1 : LT 16.9 17.3 16.1 15.6 15.6 LU 25.4 26.0 27.7 27.8 27.3 HU 11.9 12.2 11.5 13.6 11.7 MT 8.4 8.2 7.8 9.0 7.4 NL 8.2 8.0 8.5 8.8 9.5 AT 23.9 24.4 24.8 23.3 25.2 PL 21.8 21.5 26.7 22.1 27.6 PT 23.0 23.0 : 21.7 : RO 14.3 14.3 13.6 16.3 13.6 SI 34.1 33.9 34.4 33.5 34.9 SK 20.9 20.8 20.8 21.8 20.8 FI 22.8 24.2 22.6 27.4 23.0 SE 20.2 20.2 19.8 19.5 19.5 UK 20.8 20.8 20.7 21.2 20.6 EU27 21.2 21.0 20.9 22.1 20.8 Men 20.4 20.5 20.1 20.3 Women 20.4 Source: Eurostat, EU LFS. Seasonally adjusted Data Note: : not available

21.1 28.4 17.6 13.4 8.1 20.4 31.5 : 44.3 20.6 28.6 20.3 : : 15.5 27.0 11.1 6.9 9.6 25.4 27.8 : 13.6 35.3 20.9 24.0 : 20.5 20.6 20.5

21.0 27.9 17.4 12.7 7.9 : 31.3 : 44.2 20.3 28.5 : : : 16.1 26.7 10.8 6.9 8.7 25.3 27.4 : : 35.6 20.9 22.0 : 20.3 20.3 20.2

2011 Apr

54

Table 10: Long-term unemployment rate

2010q4 change on previous year (pps)

Table 11: Job Vacancy rate

2010q2 change on previous year (pps) 2010q3 change on previous year (pps) 2010q4 change on previous year (pps) 2011q1 change on previous year (pps)

2009q4

2010q1

2010q2

2010q3

2010q4

2009q2

2009q3

2009q4

2010q1

2010q2

2010q3

2010q4

1.1 1.1 1.2 1.1 1.1 0.0 AT 3.5 4.0 4.1 4.2 3.9 -0.3 BE 3.4 4.3 4.3 4.5 5.9 1.4 BG 0.7 1.2 1.1 1.4 1.8 0.4 CY 2.1 2.9 3.0 3.1 3.0 -0.1 CZ 3.3 3.5 3.3 3.1 3.1 0.0 DE 0.7 1.2 1.3 1.5 1.6 0.1 DK 4.9 7.4 8.5 8.2 6.6 -1.6 EE 5.5 6.6 7.2 7.4 8.2 0.8 ES 1.7 2.0 1.9 2.0 2.2 0.2 FI 3.7 3.9 3.8 4.0 3.9 -0.1 FR 4.3 5.0 5.4 5.7 6.5 0.8 GR 4.5 5.2 5.5 5.7 5.6 -0.1 HU 4.8 5.8 6.4 7.0 7.7 0.7 IE 3.9 4.2 4.1 3.8 4.2 0.4 IT 4.4 6.1 7.4 7.5 8.5 1.0 LT 1.1 1.3 1.4 1.0 1.6 0.6 LU 6.0 8.0 8.1 8.3 9.3 1.0 LV 3.2 3.2 2.9 3.2 3.0 -0.2 MT 0.9 1.2 1.2 1.2 1.3 0.1 NL 2.6 2.9 2.9 3.0 3.3 0.3 PL 4.9 5.4 5.7 6.0 5.9 -0.1 PT 1.7 2.6 2.4 2.6 2.6 0.0 RO 1.4 1.5 1.5 1.5 1.5 0.0 SE 1.8 2.6 3.2 3.3 3.6 0.3 SI 7.5 8.8 9.1 9.4 9.5 0.1 SK 2.1 2.4 2.6 2.6 2.6 0.0 UK 3.3 3.7 3.8 3.8 4.0 0.2 EU27 3.2 3.8 3.9 3.9 4.0 0.1 Men 3.7 3.6 3.7 3.9 0.2 Women 3.3 Source: Eurostat, EU LFS. Data non-seasonally adjusted.

: : : 1.8 1.8 : : : : : : : BE 0.7 0.7 0.7 0.8 0.7 0.8 0.8 0.8 0.0 0.1 0.1 0.0 BG 1.2 1.0 0.8 0.8 0.8 0.9 0.8 0.8 -0.4 -0.1 0.0 0.0 CZ : : : 1.2 1.3 1.4 1.2 1.4 : : : 0.2 DK : : 2.2 2.2 1.9 2.0 2.1 2.7 : : -0.1 0.5 DE 0.8 1.0 0.8 0.9 1.1 1.2 1.0 1.2 0.3 0.2 0.2 0.3 EE 0.4 0.3 0.3 0.4 0.6 0.5 0.6 0.7 0.2 0.2 0.3 0.3 IE 2.0 1.5 1.2 1.9 1.1 0.9 0.6 : -0.9 -0.6 -0.6 : GR 0.6 0.7 0.7 1.4 1.4 1.1 1.1 1.1 0.8 0.4 0.4 -0.3 ES 0.3 0.3 0.3 0.3 0.4 0.4 0.6 0.7 0.1 0.1 0.3 0.4 FR 0.5 0.5 0.5 0.7 0.7 0.6 0.6 : 0.2 0.1 0.1 : IT : : : 1.7 1.9 1.7 1.1 1.6 : : : -0.1 CY 0.3 0.2 0.2 0.2 0.2 0.3 0.3 0.4 -0.1 0.1 0.1 0.2 LV 0.5 0.5 0.4 0.6 0.6 0.8 0.6 0.9 0.1 0.3 0.2 0.3 LT 0.4 0.3 0.3 0.5 0.5 0.7 0.7 0.8 0.1 0.4 0.4 0.3 LU 0.9 0.8 0.9 1.1 1.0 0.9 1.0 1.2 0.1 0.1 0.1 0.1 HU 2.2 2.4 1.2 3.4 3.4 3.0 3.0 : 1.2 0.6 1.8 : MT 1.7 1.6 1.5 1.4 1.6 1.5 1.6 1.7 -0.1 -0.1 0.1 0.3 NL 1.4 1.5 1.4 1.6 1.7 2.1 2.2 2.3 0.3 0.6 0.8 0.7 AT 0.7 0.6 0.5 0.7 0.6 0.6 0.5 0.7 -0.1 0.0 0.0 0.0 PL 0.4 0.4 0.4 0.4 0.5 0.5 0.4 0.4 0.1 0.1 0.0 0.0 PT 0.9 0.8 0.5 0.7 0.6 0.6 0.5 0.7 -0.3 -0.2 0.0 0.0 RO 0.6 0.6 0.5 0.5 0.6 0.6 0.7 0.7 0.0 0.0 0.2 0.2 SI 1.0 0.9 0.8 0.8 0.7 0.8 0.8 0.8 -0.3 -0.1 0.0 0.0 SK 1.7 1.4 1.1 2.2 2.1 1.7 1.4 2.7 0.4 0.3 0.3 0.5 FI 0.9 0.7 0.8 1.1 1.4 1.2 1.2 : 0.5 0.5 0.4 : SE 1.6 1.7 1.7 1.6 1.8 1.8 1.8 1.7 0.2 0.1 0.1 0.1 UK 1.4 1.3 1.3 1.3 1.4 1.4 1.5 1.6 0.0 0.1 0.2 0.3 EU27 Source: Eurostat, Job vacancy statistics. Data non-seasonally adjusted. NACE: B-S (Industry, construction and services (except activities of households as employers and extra-territorial organisations and bodies). DK, IT: cover only sections B to N. FR, GR, PT: does not include section O. FR, IT, MT: includes only business units with 10 or more employees

2011q1

55

Table 13: Labour productivity

Labour productivity % change on previous quarter % change on previous year 2010 2010 2010 2011 2009 q1 q2 q3 q4 q1 q3 q4 q1 q2 -0.5 -2.5 2.3 0.5 0.8 0.4 0.1 0.7 -2.3 -0.1 2.2 2.6 EU-27 -0.4 -2.3 2.2 0.3 0.8 0.4 0.1 0.8 -1.9 0.0 2.2 2.6 EURO -0.7 -2.4 1.5 -0.3 0.6 0.1 0.4 0.8 -1.8 0.8 1.9 2.1 BE 3.5 -2.9 6.4 2.7 2.9 1.6 1.3 1.3 -1.8 -3.9 4.8 6.5 BG 1.2 -3.1 3.1 1.5 0.6 0.4 0.1 1.0 -2.6 -1.3 3.3 3.3 CZ -2.9 -2.2 4.2 1.2 0.6 1.6 0.0 -0.4 -2.2 2.1 3.4 5.1 DK -0.4 -4.7 3.1 0.5 1.7 0.5 0.1 1.1 -4.2 -1.7 2.5 3.5 DE -5.2 -4.4 8.3 3.0 2.0 0.7 0.3 -0.9 -5.3 3.2 8.1 9.2 EE -2.4 0.6 3.2 2.7 -0.6 1.7 -0.8 : 0.9 2.9 4.3 2.3 IE 0.8 -1.3 -2.4 -1.4 -0.6 -1.0 -1.3 3.1 -3.2 -0.8 -1.9 -1.3 EL 1.3 3.1 2.2 0.3 0.3 0.7 0.5 0.7 3.6 3.4 2.5 2.4 ES -0.7 -1.5 1.4 0.0 0.3 0.2 0.2 0.7 -1.3 0.5 1.6 1.4 FR -1.6 -3.6 2.0 0.4 0.7 0.5 -0.2 0.7 -3.1 -0.7 2.0 2.5 IT 0.8 -1.0 1.3 : : : : : : : : : CY -5.1 -5.5 4.6 1.8 -0.6 0.0 0.7 0.1 -3.5 -2.5 8.9 4.3 LV 3.6 -8.5 6.8 3.7 1.1 -0.1 1.2 3.0 -7.6 -6.2 6.2 8.5 LT -3.2 -4.5 1.9 -0.3 0.4 0.8 1.8 : -3.2 1.8 0.4 3.4 LU 2.1 -4.0 1.0 0.9 -0.5 0.4 0.1 1.9 -3.4 -2.2 1.1 1.0 HU 2.7 -3.1 1.1 : : : : : : : : : MT 0.4 -2.8 2.3 0.4 1.0 0.1 0.3 0.9 -2.3 -0.7 2.0 3.3 NL 0.4 -3.0 1.0 -0.1 0.4 0.9 0.4 0.5 -2.3 -0.4 0.2 1.2 AT 1.3 1.3 3.4 1.0 -0.3 1.1 0.8 0.8 0.8 3.6 3.9 3.0 PL -0.5 0.1 2.9 1.1 1.0 0.8 -0.1 -0.5 1.0 1.8 3.6 3.0 PT 7.3 -5.4 0.5 : : : : : : : : : RO 0.9 -6.4 3.4 0.4 1.2 0.8 1.4 0.9 -6.8 -2.8 2.5 3.3 SI 2.8 -2.3 5.5 1.0 1.0 0.3 0.6 -0.5 -1.2 0.0 7.8 6.6 SK -0.6 -5.6 3.5 -0.1 2.3 0.3 1.8 0.6 -5.4 -1.7 2.6 4.8 FI -1.5 -3.4 4.5 : : : : : : : : : SE UK -0.8 -3.4 1.0 0.4 0.4 0.2 -0.3 0.1 -3.7 -1.4 0.8 1.1 Source: Eurostat, labour productivity (namq_aux_lp). Data seasonally and working-day adjusted for change on previous quarter. Annual % change 2008 2009

q3 2.3 2.1 0.9 5.9 2.7 5.1 3.1 9.7 3.3 -1.8 1.9 1.2 2.1 : 2.5 6.5 1.2 0.8 : 1.9 1.5 3.9 2.4 : 2.8 4.6 2.6 : 1.5

q4 1.8 1.7 0.8 8.8 2.6 3.5 2.7 6.1 3.0 -4.3 1.9 0.7 1.4 : 1.9 5.9 2.7 0.9 : 1.8 1.6 2.7 2.8 : 3.9 2.9 4.3 : 0.8

2011 q1 2.1 2.2 1.9 7.3 2.1 1.8 3.4 2.1 : 0.1 2.3 1.4 1.7 : 0.2 5.2 : 1.8 : 2.3 2.2 2.5 1.1 : 4.4 1.4 5.0 : 0.4

56

Table 14: Nominal compensation per employee

% change on previous quarter 2010 q1 q2 q3 q4 EU-27 : : : : : : : EURO 3.2 1.4 1.7 0.3 0.5 0.1 0.5 BE 3.6 1.8 1.1 -0.8 1.1 0.7 0.5 BG** 16.3 9.4 7.2 -3.4 1.7 -3.5 11.5 CZ 6.3 0.4 3.8 2.8 0.7 0.9 -0.5 DK 3.6 2.4 2.7 1.1 0.3 0.9 0.0 DE* 2.0 0.2 2.0 0.8 0.5 0.5 0.4 EE 10.1 -3.3 -0.3 2.2 1.0 0.3 -0.9 IE* 3.4 0.0 -1.9 -1.6 0.6 -1.4 -0.6 EL 7.0 3.6 -3.5 -0.4 -4.6 1.9 -2.7 ES 6.2 3.9 0.6 -0.4 0.1 -0.5 0.2 FR* 2.6 1.5 2.0 0.3 0.5 0.3 0.7 IT* 3.0 -0.1 1.9 0.4 1.3 -1.0 1.1 CY** 2.4 3.2 2.6 -11.0 3.8 -0.1 11.4 LV 15.7 -12.2 -6.5 -0.6 0.6 1.8 1.7 LT 14.3 -11.1 -1.3 9.1 -2.4 -1.4 -2.3 LU* 2.1 1.8 1.6 -0.8 0.8 1.5 0.4 HU 7.0 -2.2 -0.2 5.1 -5.0 0.4 -1.7 MT** 4.6 2.6 -1.1 -3.1 0.8 -0.9 1.7 NL* 3.4 2.2 1.1 -0.2 0.9 0.3 0.4 AT* 3.2 1.8 1.3 0.6 0.2 0.2 0.2 PL 8.9 2.9 4.0 : : : : PT** 3.0 3.4 1.5 -18.2 12.2 -4.7 14.8 RO** 31.9 -6.6 1.3 -33.9 17.1 4.4 20.3 SI 7.2 1.8 3.9 1.1 1.0 0.6 0.8 SL 6.9 5.0 2.7 1.7 1.2 -1.3 1.8 FI 5.1 1.7 1.8 -0.5 0.6 1.0 0.9 SE** 1.5 1.3 2.7 -0.8 4.4 -3.2 3.1 UK 1.5 2.5 3.2 2.0 -1.1 0.4 0.3 Source: ECB -Statistical Data Warehouse and own calculations Note: seasonally and working day adjusted Note: * indicates not working day adjusted Note: ** indicates neither seasonally nor working day adjusted

% change on previous year 2008 2009 2010

2011 q1 : 0.6 0.0 -2.2 1.3 0.9 1.2 0.7 : -0.4 1.0 0.4 0.6 : -0.6 10.4 : 8.9 0.1 : 0.1 : : -29.8 : 1.3 1.5 -3.5 0.8

% change on previous year 2010 q1 q2 q3 : : : 1.7 1.9 1.4 0.3 1.3 0.9 12.4 7.4 3.7 2.1 3.9 5.2 3.4 2.8 2.3 1.7 2.1 2.0 -3.0 -1.1 0.9 -1.3 -0.3 -2.6 1.3 -3.7 -2.3 1.6 1.4 0.0 2.2 2.2 1.9 1.3 2.9 1.5 2.8 2.0 2.6 -11.7 -9.5 -4.8 -5.5 -1.8 0.5 1.5 1.2 1.7 2.1 -1.4 0.0 -2.7 -0.3 0.3 0.9 1.1 1.1 1.4 1.3 1.1 : : : 2.0 2.2 1.6 5.6 8.3 -2.9 3.0 3.7 3.4 2.9 2.9 1.5 1.5 1.6 1.9 2.9 2.1 2.3 5.6 2.7 2.9

q4 : 1.4 1.4 5.8 4.0 2.2 2.2 2.6 -3.1 -5.8 -0.5 1.8 1.8 2.8 3.5 2.6 2.0 -1.4 -1.5 1.5 1.2 : 0.3 -2.8 3.6 3.3 2.0 3.4 1.6

2011 q1 : 1.8 2.3 7.1 2.4 2.1 2.6 1.1 : -5.7 1.0 1.8 2.0 : 3.5 3.8 : 2.2 1.8 : 0.7 : : 3.2 : 2.9 4.1 0.6 0.4

57

Table 15: Nominal unit labour cost

% change on previous year % change on previous quarter 2010 q2 q3 q4 0.2 0.2 -0.1 -0.3 -0.3 0.4 0.4 0.6 0.1 : : : 0.1 0.6 -0.7 -0.4 -0.7 0.0 -1.2 0.0 0.4 -1.0 -0.4 -1.2 1.2 -3.0 0.1 3.2 1.5 : -0.2 -1.2 -0.3 0.2 0.1 0.5 0.6 -1.5 1.4 : : : 1.2 1.8 1.0 -3.4 -1.2 -3.5 0.5 0.7 -1.4 -4.4 0.0 -1.8 : : : -0.1 0.2 0.1 -0.3 -0.7 -0.2 0.3 0.2 1.1 : : : : : : -0.2 -0.2 -0.6 0.2 -1.6 1.2 -1.6 0.8 -0.9 : : : -1.5 0.2 0.5 % change on previous year 2010 q2 q3 q4 0.8 0.7 1.1 -0.7 -0.7 -0.3 -0.8 0.0 0.6 : : : 0.6 2.5 1.3 -2.2 -2.6 -1.2 -1.3 -1.0 -0.5 -9.5 -8.0 -3.3 -2.6 -5.7 -5.8 -2.3 -1.8 : -0.9 -1.9 -2.3 0.8 0.7 1.0 0.4 -0.6 0.4 : : : -13.2 -7.1 1.6 -9.5 -5.6 -3.2 -2.2 0.5 -0.7 -2.4 -0.8 -2.2 : : : -2.1 -0.8 -0.3 0.1 -0.4 -0.4 4.2 1.9 3.2 : : : : : : 0.4 0.6 -0.3 -3.5 -3.0 0.4 -3.1 -0.7 -2.2 : : : 1.6 1.3 0.9

2008 2009 2010 q1 1.0 1.2 0.9 0.9 EU-27 3.6 3.9 -0.5 -0.1 EURO -0.6 4.4 4.3 -0.4 BE : 12.5 12.7 0.8 BG 1.3 5.1 3.5 -0.3 CZ -0.1 6.8 4.7 -1.5 DK 0.3 2.4 5.2 -0.9 DE -0.8 16.2 1.2 -7.9 EE -4.2 5.9 -0.6 -4.9 IE -5.4 6.2 5.0 -1.1 EL -0.7 4.9 0.8 -1.5 ES 0.3 2.9 3.0 0.3 FR 0.0 4.7 3.7 -0.2 IT : 1.5 4.3 1.5 CY -2.3 22.0 -7.0 -10.6 LV 5.2 10.4 -2.8 -7.6 LT -0.5 5.4 6.7 -0.3 LU 4.2 4.8 1.9 -1.1 HU : 2.3 6.1 -3.1 MT -0.6 2.9 5.2 -1.1 NL 0.7 2.8 5.0 0.6 AT 1.6 7.5 1.6 0.6 PL : 3.5 3.3 -1.4 PT : 22.9 -1.3 0.8 RO 0.7 5.9 8.5 0.6 SI 0.7 4.0 7.5 -2.7 SK -0.5 5.8 7.8 -1.5 FI : 3.1 4.8 -1.6 SE 2.3 6.1 2.1 UK 1.6 Source: Eurostat, nominl unit labour (costnamq_aux_ulc). Note: Euro Area refers to Euro Area consisting of 17 Member States

2011 q1 0.2 -0.1 -0.8 : 0.4 1.3 0.1 1.6 : : 0.4 -0.4 -0.1 : -0.8 7.2 : 6.9 : : -0.4 : : : : 1.8 0.9 : 0.8

q1 1.2 -0.5 -1.5 : -1.2 0.0 -0.8 -10.3 -5.4 -4.1 -0.9 0.6 -0.7 : -18.9 -11.0 1.1 1.0 : -1.1 1.3 4.5 : : 0.5 -4.6 -1.0 : 4.8

2011 q1 0.4 -0.4 0.4 : 0.3 0.2 -0.7 -0.9 : : -1.3 0.4 0.3 : 3.2 -1.3 : 0.3 : : -1.5 : : : : 1.5 -0.8 : 0.0

58

Table 16: Real unit labour cost

% change on previous year 2008 2009 2.8 2.8 3.2 8.1 1.0 4.3 3.7 1.2 3.6 3.7 0.2 2.4 1.4 4.6 -5.6 0.9 7.0 -2.4 3.5 5.3 4.2 -2.0 2.7 -5.2 5.1 8.8 6.8 2.9 4.6 2010 -1.4 -1.3 -2.2 -2.1 0.2 -4.6 -1.5 -9.2 -2.4 -3.5 -2.5 -0.1 -0.8 -0.5 -8.5 -9.5 -5.5 -3.9 -5.9 -2.7 -0.9 -0.6 -2.3 -3.5 -0.1 -3.1 -3.5 -2.8 -0.8 2010 q1 q2 -0.7 -0.7 -0.2 : -0.2 -0.7 -1.2 -1.5 -0.3 2.1 -0.3 -0.1 -0.1 : 1.0 -5.4 -2.4 -5.1 : -0.8 -0.7 -0.5 : : -0.6 -0.5 -1.7 : -1.1 q3 -0.7 -0.7 0.1 : 0.7 -1.0 -0.1 -2.4 -2.6 0.8 -1.8 -0.4 -2.2 : 0.4 -3.1 -1.4 -2.0 : 0.1 -1.2 -0.1 : : -0.5 -2.4 0.1 : -0.2 q4 0.0 0.4 -0.7 : -0.2 -0.5 0.3 -1.7 5.4 : -0.6 0.4 1.8 : 0.0 -3.9 -2.7 -1.6 : -0.1 -0.7 0.0 : : -0.4 1.4 -2.1 : -0.5 -0.1 -0.3 -1.0 : 2.4 -1.4 0.2 -1.3 -4.2 -6.6 -1.1 -0.1 0.2 : -3.3 3.8 -1.7 4.9 : -1.6 0.3 1.4 : : 0.8 1.1 -1.6 : -0.1 % change on previous quarter 2011 q1 -0.7 -0.6 -1.4 : 0.9 0.9 -0.1 0.0 : : -0.4 -0.8 -0.7 : -1.6 6.5 : 8.1 : : -1.0 : : : : 1.9 0.0 : -1.0 q1 -0.8 -1.0 -3.0 : 0.5 -3.4 -1.7 -9.1 -2.2 -6.3 -1.5 0.5 -0.6 : -11.1 -8.5 -1.9 -1.7 : -1.6 0.1 3.1 : : 0.4 -3.9 -1.7 : 1.6 q2 -1.6 -1.5 -2.6 : 1.7 -6.1 -2.0 -9.7 -0.7 -5.3 -1.4 0.1 -0.2 : -9.5 -8.9 -6.4 -4.7 : -3.7 -1.4 2.2 : : -0.3 -4.0 -4.6 : -1.8 % change on previous year 2010 q3 -1.7 -1.8 -1.7 : 3.0 -5.3 -1.4 -10.9 -4.8 -5.0 -3.2 -0.5 -1.7 : -6.5 -10.9 -5.6 -4.8 : -2.9 -2.1 0.8 : : -0.4 -4.2 -3.6 : -1.1 q4 -1.5 -1.3 -1.8 : 2.7 -3.6 -0.8 -6.7 -1.9 : -3.7 -0.2 -0.4 : -1.9 -8.6 -7.9 -4.0 : -2.4 -2.3 0.8 : : -0.7 -0.5 -5.2 : -1.7 2011 q1 -2.1 -1.6 -2.2 : 1.2 -1.3 -1.1 -5.5 : : -3.0 -0.9 -1.3 : -0.2 -6.2 : -1.1 : : -3.6 : : : : 0.4 -3.7 : -2.7

EU-27 EURO BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK

0.8 1.5 2.4 3.7 3.2 2.8 1.3 8.4 7.5 2.8 2.4 0.3 1.8 -3.4 6.6 0.5 1.1 0.0 -0.4 0.6 0.9 4.3 1.9 6.6 1.8 1.1 3.9 -0.1 -0.7

Source: Eurostat, nominl unit labour (costnamq_aux_ulc, costnama_aux_ulc). Data seasonally adjusted for change on previous quarter. Data working-day adjusted for change on previous year. Note: Euro Area refers to Euro Area consisting of 17 Member States

59

Table 17: Weekly working hours level

Weekly working hours of full-time employees Level 2008 EU-27 EURO 41.0 40.9 40.8 41.4 42.3 39.1 42.1 40.6 40.2 42.2 41.0 39.5 40.4 40.5 40.7 40.3 40.4 40.7 41.2 41.1 42.9 41.8 40.4 41.0 41.6 40.4 39.2 39.6 41.0 2009 40.6 40.5 40.8 40.7 41.6 39.1 41.4 39.5 39.5 42.1 40.7 39.3 39.9 40.2 40.6 39.9 41.4 40.5 41.0 41.0 42.0 41.4 40.4 40.7 41.3 39.9 38.6 39.2 41.0 2010 q1 40.8 40.8 41.2 40.9 41.6 39.5 41.7 40.5 39.6 42.3 40.7 39.8 40.1 40.7 40.2 39.8 41.4 40.5 40.6 41.2 41.9 41.3 40.5 40.7 41.2 40.3 39.0 39.9 41.1 40.7 40.7 41.8 40.5 42.3 39.2 41.5 40.5 39.5 41.1 40.3 40.3 40.0 39.6 40.3 39.5 41.2 40.5 41.1 41.1 41.9 41.0 40.4 39.9 40.8 40.0 38.6 39.5 41.0 q2 40.8 40.7 40.8 40.9 42.4 39.2 41.5 40.2 39.6 42.5 41.3 39.4 40.2 40.7 39.8 39.9 41.5 40.5 40.4 40.1 41.6 41.1 40.7 41.2 40.7 40.9 38.6 39.6 40.9 2010 q3 41.5 41.4 41.4 41.2 41.4 40.6 42.0 41.1 40.4 43.5 41.5 40.4 40.8 41.7 40.6 40.2 41.6 40.6 40.0 41.7 43.1 42.8 41.7 41.4 42.0 40.3 40.1 40.9 41.3 q4 40.4 40.3 41.0 40.9 40.3 39.1 41.7 40.3 39.1 42.0 39.8 39.0 39.5 41.0 40.0 39.8 41.2 40.5 40.7 41.8 41.1 40.4 39.3 40.5 41.4 39.9 38.7 39.8 41.1 Level 2011 q1 : : : : 42.2 40.2 : : : : 41.0 : : 40.1 : 39.7 : : : : : : 41.6 : : : : 40.1 : 20.0 19.9 22.9 22.0 21.9 20.0 18.1 20.4 18.8 19.9 18.8 22.7 21.0 19.7 20.5 23.3 22.0 23.8 21.7 20.6 20.1 21.0 18.9 27.0 19.5 20.8 19.9 23.5 18.4 19.9 19.8 23.0 20.3 21.6 19.8 18.1 21.2 18.7 19.6 18.5 22.4 21.0 19.6 21.6 23.4 20.5 23.7 20.9 20.7 20.0 20.8 18.6 27.4 19.4 22.0 19.7 23.4 18.4 2008 Level 2009

Weekly working hours of part-time employees

Level
2010 q1 20.1 20.0 23.3 20.7 21.0 19.8 18.3 21.3 18.6 20.0 18.4 22.5 21.3 19.3 21.4 22.5 20.9 23.9 20.6 20.8 20.0 20.8 18.6 27.2 18.8 20.1 20.3 24.0 18.5 19.9 19.9 23.7 20.0 21.2 19.6 18.3 22.9 18.4 19.2 18.1 22.9 21.0 18.4 21.8 22.7 19.9 23.4 20.1 20.5 20.0 20.4 17.3 24.4 18.5 21.2 19.6 23.5 18.3 q2 20.0 19.8 23.0 20.6 21.2 19.6 18.2 20.5 18.6 20.2 18.5 22.1 21.2 19.3 21.2 23.0 21.7 23.9 20.6 20.2 19.7 21.0 19.1 28.6 18.5 20.5 20.8 23.7 18.4 2010 q3 20.5 20.3 23.5 21.6 21.1 20.5 18.4 21.0 19.1 20.8 19.0 22.8 21.9 20.1 22.6 22.6 21.7 24.1 21.5 21.6 20.9 21.7 19.7 28.9 19.5 19.7 21.2 24.8 18.8 q4 19.9 19.8 22.9 20.6 20.5 19.6 18.4 21.1 18.2 20.1 18.0 22.1 21.1 19.7 20.1 21.7 20.3 24.3 20.1 20.9 19.3 20.3 18.2 26.2 18.8 19.0 19.7 23.9 18.5 2011 q1 : : : : 21.4 19.4 : : : : 18.5 : : 18.8 : 21.3 : : : : : : 16.2 : : : : 23.6 :

BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK

Source: Eurostat, EU LFS (lfsq_ewhan2). Data non-seasonal. Note: Euro Area refers to Euro Area consisting of 17 Member States

60

Table 18: Labour productivity per person employed

Annual % change 2000 2001 1.0 0.4 -0.6 4.9 2.0 -0.2 0.8 6.6 2.5 4.1 0.5 0.1 -0.2 1.8 6.8 11.0 -2.9 4.2 -3.3 -0.1 -0.2 3.5 0.1 6.8 2.4 2.9 0.9 -0.8 1.6 2002 0.9 0.2 1.5 4.4 1.3 0.4 0.6 6.6 4.9 1.2 0.3 0.4 -1.2 0.0 3.4 3.1 0.8 4.3 2.0 -0.4 1.7 4.6 0.1 17.0 2.4 4.5 0.9 2.4 1.3 2003 1.0 0.4 0.8 2.5 5.0 1.5 0.7 6.0 2.5 4.7 0.0 1.0 -1.5 -1.8 5.1 7.8 -0.3 3.9 -1.3 0.8 0.9 5.1 -0.3 5.3 3.2 3.7 1.9 2.9 1.8 2004 1.8 1.4 2.3 4.1 4.1 2.9 0.8 7.3 1.2 1.9 -0.3 2.4 1.1 0.4 7.4 7.4 2.1 6.0 1.8 3.1 1.1 4.1 1.6 10.3 4.0 5.3 3.7 5.0 1.9 2005 1.0 0.7 0.3 3.6 5.2 1.4 0.9 7.3 1.0 1.5 -0.5 1.3 0.1 0.3 8.9 5.2 2.4 3.4 3.2 1.5 1.0 1.4 1.1 5.8 4.7 5.0 1.5 2.9 1.1 2006 1.5 1.4 1.5 3.1 4.8 1.3 2.7 4.9 0.9 1.8 0.1 1.2 0.1 2.3 7.0 5.9 1.4 3.0 0.8 1.7 2.2 2.9 0.9 7.1 4.3 6.3 2.5 2.6 1.9 2007 1.2 1.0 1.3 3.2 3.4 -1.1 1.0 6.1 1.9 2.5 0.5 0.9 0.2 1.8 6.2 6.9 2.1 1.1 1.2 1.3 1.9 2.3 2.4 5.9 3.8 8.3 3.1 1.0 2.0 2008 -0.4 -0.3 -0.7 3.5 1.2 -2.9 -0.4 -5.2 -2.4 0.8 1.3 -0.4 -1.6 0.8 -5.1 3.6 -3.2 2.1 2.6 0.4 0.4 1.3 -0.5 7.3 0.9 2.8 -0.6 -1.5 -0.8 2009 -2.5 -2.3 -2.4 -2.9 -3.1 -2.2 -4.7 -4.4 0.6 -1.3 3.1 -1.4 -3.6 -1.0 -5.5 -8.5 -4.5 -4.0 -3.1 -2.8 -3.0 1.3 0.1 -5.4 -6.4 -2.3 -5.6 -3.4 -3.4 2010 2001-2010 2.3 2.2 1.5 6.4 2.9 4.2 3.1 8.3 3.2 -2.4 2.2 1.6 2.0 1.3 4.6 6.8 1.9 1.0 1.4 2.3 1.0 3.4 2.9 0.5 3.4 5.5 3.5 4.4 1.0 8.0 5.1 5.5 37.7 29.9 5.2 5.4 51.5 17.4 15.6 7.4 7.3 -4.6 6.0 44.7 59.8 -0.5 27.6 5.2 7.9 7.1 34.2 8.7 77.7 24.6 50.4 12.1 16.3 8.6 compounded 2001-2007 8.7 5.6 7.3 28.8 28.7 6.3 7.7 54.4 15.8 19.0 0.6 7.5 -1.4 4.8 54.3 57.8 5.6 28.9 4.3 8.1 8.9 26.4 6.0 74.2 27.6 41.9 15.4 17.0 12.2 2008-2010 -0.7 -0.5 -1.6 6.9 0.9 -1.0 -2.1 -1.8 1.3 -2.9 6.7 -0.2 -3.2 1.1 -6.2 1.2 -5.8 -1.0 0.8 -0.2 -1.6 6.1 2.5 2.0 -2.3 6.0 -2.9 -0.7 -3.2

EU-27 EURO BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK

2.3 1.5 1.6 8.3 3.8 3.0 1.3 11.6 5.0 4.0 0.0 1.2 1.7 3.3 10.4 7.5 2.7 3.9 : 1.7 2.7 5.9 1.8 3.2 3.1 3.4 3.2 1.9 2.7

Source: Eurostat, real labour productivity (nama_aux_lp) available at http://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/dataset?p_product_code=NAMA_AUX_LP Note: Euro Area refers to Euro Area consisting of 17 Member States

61

Table 19: Nominal labour cost (as compensation per employee)

Annual % change 2000 EU-27 EURO BE BU CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK : 2.7 2.1 9.9 6.2 3.5 1.9 14.5 8.0 : 2.8 2.5 2.2 6.0 7.1 -0.7 5.3 15.0 : 4.6 2.2 10.8 6.3 70.1 10.2 13.3 3.8 7.3 5.7 2001 : 2.7 3.7 13.4 7.9 4.2 1.6 9.6 7.5 3.7 3.7 2.7 2.9 3.8 4.3 7.1 3.5 15.6 5.4 4.9 1.2 10.2 4.0 55.0 11.6 5.8 4.6 4.3 5.1 2002 : 2.6 3.8 6.0 7.4 3.7 1.3 9.1 5.1 11.4 3.4 3.5 2.2 4.8 2.8 5.0 3.0 13.7 3.1 4.3 1.9 2.3 3.4 16.7 8.3 8.7 1.7 2.9 3.1 2003 : 2.4 1.8 4.2 8.8 3.8 1.6 11.7 6.0 6.3 2.8 2.8 2.4 7.7 11.0 8.9 1.1 9.9 4.6 3.4 2.4 1.6 3.5 27.4 7.8 8.2 2.7 3.2 5.0 2004 : 2.2 1.7 6.2 5.7 3.3 0.4 12.2 5.2 4.2 2.2 3.5 3.3 1.9 14.5 10.9 3.3 10.9 4.8 3.4 0.9 1.9 2.6 13.8 7.7 8.4 3.7 4.0 3.8 2005 : 2.0 1.7 9.3 4.9 3.7 -0.1 10.9 6.2 5.2 2.9 3.0 2.9 1.8 25.1 11.5 4.6 7.1 1.5 1.1 2.4 1.7 4.7 29.1 6.0 9.4 3.7 3.1 3.6 2006 : 2.3 3.4 6.3 5.9 3.5 1.1 14.1 4.7 3.6 3.3 3.2 2.2 3.0 23.2 16.7 2.6 5.3 4.0 2.3 3.0 1.8 1.8 12.4 5.4 7.9 2.9 2.1 4.5 2007 : 2.5 3.4 12.7 6.3 3.6 0.9 24.6 5.4 6.1 4.6 2.5 2.2 2.9 35.1 13.9 3.7 6.7 1.3 3.0 3.1 4.9 3.6 22.0 6.2 8.4 3.7 5.2 5.0 2008 : 3.2 3.6 16.3 6.3 3.6 2.0 10.1 3.4 7.0 6.2 2.6 3.0 2.4 15.7 14.3 2.1 7.0 4.6 3.4 3.2 8.9 3.0 31.9 7.2 6.9 5.1 1.5 1.5 2009 : 1.4 1.8 9.4 0.4 2.4 0.2 -3.3 0.0 3.6 3.9 1.5 -0.1 3.2 -12.2 -11.1 1.8 -2.2 2.6 2.2 1.8 2.9 3.4 -6.6 1.8 5.0 1.7 1.3 2.5 2010 : 1.7 1.1 7.2 3.8 2.7 2.0 -0.3 -1.9 -3.5 0.6 2.0 1.9 2.6 -6.5 -1.3 1.6 -0.2 -1.1 1.1 1.3 4.0 1.5 1.3 3.9 2.7 1.8 2.7 3.2 compounded growth 2001-2010 2001-2007 2008-2010 : 25.6 29.3 137.7 74.7 40.4 11.5 150.9 49.7 58.4 39.0 30.9 25.3 39.5 169.9 101.7 31.0 101.6 35.2 33.1 23.4 47.8 36.4 479.6 88.7 99.0 36.3 34.6 44.3 : 17.9 21.2 74.1 57.6 28.8 7.0 136.2 47.5 48.0 25.1 23.1 19.5 28.7 183.9 101.1 24.0 92.9 27.3 24.6 15.9 26.8 26.2 364.3 66.5 72.7 25.3 27.5 34.4 : 6.5 6.7 36.6 10.8 9.0 4.3 6.2 1.5 7.0 11.0 6.3 4.8 8.4 -4.9 0.3 5.6 4.5 6.1 6.9 6.5 16.6 8.1 24.8 13.3 15.2 8.8 5.6 7.3

Source: ECB Statistical Data Warehouse available at http://sdw.ecb.europa.eu/home.do and own calculations

62

Table 20: Nominal unit labour cost

Nominal unit labour cost
% change on previous year compounded 2000 2001 2.3 2.2 4.3 8.1 5.8 4.4 0.8 2.8 4.9 -0.3 3.2 2.3 3.1 1.9 -2.3 -3.5 6.5 10.9 9.0 5.0 1.4 6.5 3.9 45.1 9.2 2.9 3.6 5.2 3.4 2002 2.0 2.4 2.3 1.5 6.0 3.3 0.8 2.4 0.2 10.2 3.1 3.0 3.5 4.8 -0.6 1.8 2.2 9.0 1.0 4.8 0.2 -2.2 3.2 -0.2 6.3 4.0 0.9 0.4 1.9 2003 0.0 2.0 1.0 1.6 3.6 2.2 0.8 5.3 3.4 1.5 2.8 1.8 4.0 9.6 5.6 1.0 1.4 5.7 6.0 2.5 1.5 -3.3 3.9 21.0 4.5 4.3 0.8 0.2 3.0 2004 0.8 0.8 -0.6 2.0 1.5 0.4 -0.4 4.6 4.0 2.2 2.5 1.1 2.2 1.5 6.6 3.3 1.2 4.6 2.5 0.2 -0.2 -2.1 1.0 3.1 3.7 3.0 0.0 -0.9 1.9 2005 1.6 1.2 1.5 5.6 -0.3 2.2 -1.0 3.3 5.1 3.7 3.3 1.8 2.8 1.4 14.8 6.0 2.1 3.6 -1.9 -0.4 1.4 0.3 3.6 22.0 0.9 4.2 2.2 0.2 2.5 2006 1.2 1.0 1.8 3.1 1.1 2.2 -1.6 8.7 3.7 1.8 3.2 2.0 2.1 0.6 15.2 10.1 1.2 2.3 2.8 0.6 0.8 -1.1 0.9 4.9 1.0 1.5 0.3 -0.5 2.6 2007 2.1 1.5 2.1 9.3 2.9 4.8 -0.1 17.4 3.4 3.6 4.0 1.5 1.9 1.1 27.2 6.5 1.6 5.6 0.3 1.6 1.1 2.6 1.2 15.2 2.6 0.2 0.5 4.2 3.0 2008 1.0 3.6 4.4 12.5 5.1 6.8 2.4 16.2 5.9 6.2 4.9 2.9 4.7 1.5 22.0 10.4 5.4 4.8 2.3 2.9 2.8 7.5 3.5 22.9 5.9 4.0 5.8 3.1 2.3 2009 1.2 3.9 4.3 12.7 3.5 4.7 5.2 1.2 -0.6 5.0 0.8 3.0 3.7 4.3 -7.0 -2.8 6.7 1.9 6.1 5.2 5.0 1.6 3.3 -1.3 8.5 7.5 7.8 4.8 6.1 2010 0.9 -0.5 -0.4 0.8 -0.3 -1.5 -0.9 -7.9 -4.9 -1.1 -1.5 0.3 -0.2 1.5 -10.6 -7.6 -0.3 -1.1 -3.1 -1.1 0.6 0.6 -1.4 0.8 0.6 -2.7 -1.5 -1.6 2.1 2001-2010 13.9 19.6 22.6 72.9 32.7 33.4 6.0 65.5 27.5 37.5 29.5 21.5 31.4 31.6 86.5 26.3 31.5 58.0 27.2 23.2 15.5 10.3 25.5 225.7 52.0 32.5 21.9 15.8 32.7 2001-2007 10.4 11.6 13.0 35.3 22.3 21.1 -0.7 52.8 27.4 24.6 24.3 14.3 21.3 22.5 83.9 27.4 17.3 49.6 21.0 15.1 6.4 0.4 19.0 166.3 31.5 21.8 8.5 9.0 19.8 2008-2010 3.1 7.1 8.5 27.8 8.5 10.1 6.8 8.3 0.1 10.3 4.2 6.3 8.4 7.5 1.4 -0.8 12.1 5.6 5.2 7.1 8.6 9.9 5.4 22.3 15.6 8.8 12.3 6.3 10.8

EU-27 EURO BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK

3.4 1.1 0.4 1.5 2.3 0.5 0.6 2.5 2.8 : 2.8 1.2 0.5 2.7 -2.7 -7.7 2.5 10.7 : 2.9 -0.5 4.6 4.4 64.9 7.0 9.6 0.6 5.2 2.9

Source: Eurostat, nominl unit labour (costnamq_aux_ulc). available at http://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/dataset?p_product_code=NAMA_AUX_ULC Note: Euro Area refers to Euro Area consisting of 17 Member States

63

Table 21: Sectoral unit labour cost: compounded growth rates 2001-2010
EA 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 Agriculture Industry Construction Trade Finance Other services 10.8 9.3 36.6 13.9 27.0 27.2 11.4 0.4 25.6 6.8 19.9 19.5 -0.5 8.9 8.8 6.7 5.9 6.5 30.6 9.8 15.6 18.0 22.0 40.4 30.6 5.8 3.5 7.2 14.6 28.1 0.0 3.8 11.6 10.1 6.5 9.6 121.7 25.5 122.3 73.6 191.2 113.0 98.6 3.8 56.4 45.7 125.5 58.4 11.7 20.9 42.2 19.2 29.1 34.5 14.8 1.9 56.3 14.4 67.8 90.4 22.2 2.7 40.7 4.9 48.6 62.5 -6.1 -0.8 11.1 9.1 12.9 17.2 -3.6 19.1 66.9 31.6 39.1 45.1 25.5 19.8 40.7 14.4 36.3 27.7 -23.2 -0.6 18.6 15.1 2.1 13.6 -5.1 1.6 13.0 -2.2 15.2 9.4 -10.3 -9.9 9.4 -6.4 9.3 3.8 5.7 12.8 3.2 4.5 5.4 5.5 63.3 25.3 182.7 58.9 104.5 114.5 112.2 25.9 177.5 32.7 89.0 88.8 -23.1 -0.5 1.9 19.7 8.2 13.6 32.5 -33.3 95.0 19.4 41.8 91.2 67.5 -10.8 70.7 22.3 26.4 68.2 -20.9 -25.2 14.2 -2.3 12.1 13.7 67.2 74.5 51.0 1.8 95.0 55.4 131.0 44.6 30.5 -15.7 88.9 53.6 -27.6 20.7 15.8 20.8 3.2 1.2 14.3 22.4 30.2 26.5 33.3 35.8 7.1 18.3 46.8 20.6 24.6 29.5 6.7 3.4 -11.3 4.9 7.0 4.9 7.1 7.7 55.0 25.3 22.9 28.4 26.8 -0.5 30.2 18.0 16.6 20.5 -15.5 8.2 19.0 6.2 5.4 6.5 17.0 32.1 60.2 26.9 33.1 31.3 15.1 19.8 28.8 16.0 26.7 23.4 1.6 10.3 24.4 9.4 5.0 6.4 124.4 33.9 32.5 19.6 44.3 44.2 111.1 20.0 17.1 12.4 37.3 33.1 6.3 11.6 13.2 6.4 5.1 8.3 95.8 44.3 244.6 87.2 89.7 132.7 146.5 48.8 296.2 59.3 102.1 144.3 -20.6 -3.0 -13.0 17.5 -6.1 -4.7 Total 19.7 11.7 7.1 22.6 13.0 8.5 72.9 35.3 27.8 33.9 22.4 9.4 33.4 21.2 10.1 5.8 -0.7 6.6 65.6 53.0 8.3 27.4 27.3 0.1 37.4 24.5 10.4 29.4 24.3 4.1 22.9 14.6 7.2 31.4 21.3 8.3 31.9 22.6 7.6 86.6 84.1 1.4 LT 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 2001-2010 2001-2007 2008-2010 Agriculture Industry Construction Trade Finance Other services Total 14.5 -3.9 50.6 47.1 96.7 67.4 26.3 38.6 4.1 78.0 45.1 77.5 56.0 27.5 -17.4 -7.7 -15.4 1.4 10.8 7.3 -0.9 77.3 23.4 47.6 7.2 37.0 46.1 31.5 100.0 8.7 24.9 11.4 15.8 32.1 17.2 -11.4 13.6 18.2 -3.8 18.3 10.6 12.2 -15.2 24.0 109.4 57.6 132.9 99.5 57.8 -4.3 21.0 74.9 39.0 110.8 92.9 49.6 -11.4 2.5 19.7 13.4 10.5 3.4 5.5 : : : : : : 28.5 : : : : : : 21.9 : : : : : : 6.6 16.7 4.9 53.5 5.8 25.2 34.8 23.3 6.7 2.4 28.5 0.3 23.3 25.5 15.2 9.4 2.5 19.5 5.4 1.6 7.4 7.1 5.3 0.5 30.5 17.8 18.5 26.3 15.4 9.5 -5.5 6.4 6.2 12.3 17.1 6.4 -3.8 6.3 22.6 11.0 5.5 7.8 8.4 -51.9 -15.7 25.0 16.1 62.6 74.8 16.4 -54.6 -17.7 2.6 1.8 18.8 34.1 0.4 6.0 2.5 21.8 14.1 36.9 30.4 16.0 : : : : : : : : : : : : : : : : : : : : : 238.7 294.1 276.3 271.3 312.7 574.1 226.4 298.0 232.7 177.3 135.4 238.1 450.7 166.7 -14.9 18.5 35.7 57.8 22.0 22.4 22.4 52.0 22.2 95.2 52.6 91.1 64.8 52.0 36.9 11.9 41.3 32.7 65.4 42.0 31.0 11.1 9.2 38.2 15.0 15.5 16.0 16.0 -34.0 -6.5 42.9 43.0 92.3 56.8 32.6 -32.0 -18.3 54.8 43.7 75.2 43.2 21.8 -2.9 14.4 -7.7 -0.5 9.7 9.5 8.8 -12.5 -12.0 38.0 20.9 51.8 57.8 21.5 -9.7 -16.6 26.0 1.8 33.8 37.0 8.5 -3.1 5.4 9.6 18.8 13.4 15.2 12.0 -22.5 -7.3 45.1 0.3 29.7 36.2 15.7 -26.3 -10.4 26.4 -2.6 19.8 29.5 9.0 5.1 3.5 14.8 3.0 8.3 5.1 6.1 : : : : : : : 25.8 12.4 53.2 8.3 17.7 35.4 0.0 : : : : : : :

BE

LU

BG

HU

CZ

MT

DK

NL

DE

AT

EE

PL

IE

PT

EL

RO

ES

SI

FR

SK

IT

FI

CY

SE

LV

UK

Source: ECB Statistical Data Warehouse available at http://sdw.ecb.europa.eu/home.do and own calculations. Note: Trade covers trade, repairs, hotels, restaurants, transport and communications

64

Table 22: The real effective exchange rate

2000 EU27 EURO BE BG CZ DK DE EE IE EL ES FR IT CY LV LT HU MT NL AT PL PT RO SI SL FI SE UK -10.6 -10.5 -4.8 -2.6 1.7 -5.9 -6.3 -2.8 -4.9 -6.7 -2.5 -5.2 -5.9 -2.8 2.7 1.4 3.0 -4.6 -1.8 -4.6 6.0 -0.4 29.5 -2.8 9.4 -6.0 2.9 3.8

2001 2.4 1.0 2.4 8.1 8.1 3.2 -1.6 1.3 3.1 -3.0 1.2 0.3 1.3 0.4 -4.2 -2.5 10.0 7.6 3.3 -1.0 14.1 1.7 9.9 1.1 -2.2 2.3 -6.0 -0.6

2002 6.1 4.0 1.4 0.3 16.3 3.1 0.3 1.5 0.5 9.9 1.9 2.7 3.6 3.9 -5.3 5.0 14.5 0.7 4.0 -0.9 -8.4 2.0 -18.2 1.2 3.3 0.7 1.0 1.0

2003 12.3 11.2 3.3 2.3 1.4 5.3 4.4 6.8 8.6 3.2 4.9 4.7 8.0 11.6 -2.5 3.5 2.4 7.2 4.7 2.9 -14.9 5.2 1.3 1.6 8.1 4.2 4.6 -3.1

2004 5.9 2.8 -0.3 1.5 1.4 1.1 0.4 4.9 5.5 2.2 2.6 1.6 3.0 1.0 2.5 3.6 5.7 3.9 0.4 -0.3 -5.0 0.7 -5.0 1.5 7.2 0.9 0.4 5.7

Annual % change 2005 -1.3 -2.1 -0.1 2.0 4.8 0.5 -3.4 1.0 3.5 0.7 1.2 -0.1 0.4 0.2 7.5 3.2 2.9 -3.6 -1.9 -0.7 11.1 1.6 33.5 -1.6 5.8 0.4 -3.7 -0.6

2006 1.1 -0.4 0.9 2.0 5.6 1.2 -3.0 6.8 2.5 0.6 2.2 1.1 1.2 -0.6 13.1 7.8 -4.8 2.3 -0.2 0.2 1.2 -0.7 6.9 0.1 4.5 -0.7 -1.6 2.3

2007 6.0 1.7 1.5 6.6 3.4 3.8 -0.8 14.5 3.9 1.5 3.3 1.0 1.2 -1.6 23.4 3.0 9.0 1.9 0.9 -0.1 3.8 -0.1 19.4 0.8 8.4 -0.4 3.2 2.8

2008 1.6 3.4 2.8 8.8 13.5 5.1 0.2 11.6 6.8 3.4 3.2 1.3 2.8 -0.7 16.9 5.2 1.2 1.5 1.3 -0.3 12.8 1.3 8.0 2.2 8.6 3.7 -2.9 -14.0

2009 -3.7 4.0 1.5 10.7 -4.3 3.0 3.0 0.0 -3.1 2.6 -1.6 0.1 1.7 1.9 -8.1 -3.2 -10.3 1.6 2.6 2.0 -19.7 0.7 -16.4 6.4 10.1 5.7 -7.6 -8.7

2010 -7.2 -7.2 -2.6 -1.4 2.7 -4.9 -4.0 -9.2 -8.1 -3.2 -3.8 -1.7 -2.8 -0.6 -12.1 -8.6 -1.0 -6.5 -3.4 -1.5 8.2 -2.8 -0.5 -0.9 -4.4 -4.7 6.2 3.3 2001-2010 24.3 18.8 11.3 48.4 65.2 23.2 -4.8 44.1 24.5 18.8 15.9 11.6 22.2 16.1 28.4 16.9 30.6 16.8 12.0 0.4 -3.4 10.0 32.6 13.0 60.3 12.4 -7.1 -12.8

compounded 2001-2007 36.9 19.0 9.5 25.0 48.1 19.6 -3.9 42.3 31.0 15.7 18.6 11.9 20.2 15.4 35.9 25.7 45.4 21.2 11.5 0.1 -1.5 10.9 47.4 4.9 40.4 7.6 -2.5 7.6

2008-2010 -9.2 -0.1 1.6 18.7 11.6 3.0 -1.0 1.2 -5.0 2.7 -2.3 -0.3 1.6 0.7 -5.6 -7.0 -10.2 -3.6 0.5 0.2 -2.0 -0.8 -10.1 7.7 14.2 4.5 -4.8 -18.9

Source : ECFIN AMECO database available at http://ec.europa.eu/economy_finance/db_indicators/ameco/index_en.htm Note: Real effective exchange rates, based on unit labour costs (total economy). Performance relative to the rest of 35 industrial countries: double export weights. Note: A positive sign means a deterioration of international competitiveness.

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Table 23: Real wages and salaries

Annual % change 2000 EU-27 EURO BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK : : : : : : 1.2 : : : : 2.9 : : : : : : : : : : : : : : : : : 2001 1.2 1.2 2.7 1.2 9.3 1.3 0.8 7.8 : -2.2 1.4 1.9 1.2 3.7 5.8 -0.4 2.2 7.3 3.3 -0.2 1.3 3.3 -0.6 15.2 3.6 -0.3 : 2.1 4.6 2002 1.1 1.0 2.1 -0.2 7.4 0.9 1.0 7.2 : 7.8 0.9 1.2 0.7 2.6 6.3 4.1 1.4 7.6 -0.3 0.1 1.3 5.5 -0.8 5.3 -3.3 13.6 : 1.8 2.5 2003 1.0 0.8 0.2 3.6 6.4 0.9 1.5 9.6 : 1.9 1.8 0.0 0.9 2.1 7.9 6.3 1.2 5.2 4.6 1.1 0.5 4.0 -2.3 8.1 1.7 0.8 : 1.1 1.7 2004 1.0 0.3 0.5 -1.1 3.2 2.0 -0.3 3.7 : 2.0 0.9 0.7 0.2 3.0 4.8 4.3 -0.3 3.1 1.8 1.2 -1.6 0.5 1.1 7.3 5.5 -0.3 : 2.1 4.3 2005 0.6 0.2 1.2 2.3 2.8 1.0 -0.5 6.6 : -7.9 -0.5 1.3 1.0 2.0 8.4 8.4 -0.3 4.2 0.2 0.4 1.6 2.6 0.3 5.2 3.0 6.0 : 2.6 1.9 2006 0.8 0.4 0.3 3.0 4.4 0.4 0.0 12.6 : -1.2 -0.6 1.6 0.3 2.5 17.1 14.9 0.0 5.2 1.0 1.1 0.5 4.5 -2.1 11.0 3.7 3.6 : 1.5 1.5 2007 1.6 1.0 1.4 12.1 4.9 1.5 -0.2 13.3 : 0.4 1.7 1.8 0.2 1.8 20.4 15.8 0.8 2.0 0.5 2.0 1.7 7.9 3.0 18.5 2.4 5.0 : 1.0 3.2 2008 0.6 0.4 -0.9 10.4 1.0 -0.3 0.4 2.9 : -1.6 1.1 -0.5 0.4 1.6 6.8 6.6 -0.3 2.1 -3.1 1.5 1.4 5.9 1.6 13.7 5.6 3.1 : 0.3 1.0 2009 1.3 2.4 3.6 12.3 4.8 0.6 1.8 -3.2 : 5.5 4.5 0.8 4.0 3.2 -4.0 -11.7 4.6 -0.3 -0.5 1.4 3.4 0.6 4.3 5.3 3.2 2.5 : 0.8 -1.9 2010 -0.1 -0.1 : 7.5 0.7 1.8 -0.4 -4.1 : -5.0 -0.5 1.2 : -1.0 -0.7 -5.2 -0.3 -2.5 -0.9 0.5 -0.7 0.5 -0.2 -0.1 0.3 0.8 : 0.4 0.5 compounded 2001-2010 9.5 7.7 : 62.9 54.8 10.7 4.2 70.4 : -1.4 11.1 10.4 : 23.7 98.2 48.2 9.3 38.9 6.5 9.6 9.8 41.1 4.2 133.0 28.7 39.8 : 14.4 20.9 2001-2007 7.5 4.9 8.6 22.1 45.1 8.4 2.3 78.4 : 0.1 5.7 8.7 4.5 19.1 94.4 65.9 5.2 40.0 11.4 5.9 5.4 31.8 -1.5 94.8 17.8 31.4 : 12.8 21.4 2008-2010 1.9 2.7 : 33.4 6.7 2.1 1.9 -4.5 : -1.5 5.1 1.5 : 3.9 1.9 -10.7 4.0 -0.8 -4.5 3.5 4.1 7.1 5.8 19.6 9.3 6.4 : 1.4 -0.4

Note: Nominal wages and salaries deflated by the HCPI deflator.

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Tab 24: Real unit labour cost

Real unit labour cost
% change on previous year 2000 2001 0.2 -0.2 2.2 1.8 0.9 1.9 -0.4 -2.3 -0.6 -3.4 -1.0 0.3 0.1 -1.4 -3.9 -3.2 6.4 0.5 5.6 -0.1 -0.4 2.9 0.3 5.3 0.5 -2.0 0.6 2.7 1.3 2002 -0.4 -0.2 0.3 -3.0 3.1 1.0 -0.6 -0.9 -4.2 6.5 -1.2 0.6 0.2 3.6 -4.1 1.6 0.1 0.9 -2.1 0.9 -1.1 -4.4 -0.5 -18.7 -1.3 0.1 -0.4 -1.1 -1.2 2003 -0.3 -0.2 -0.9 -0.6 2.7 0.6 -0.3 1.0 0.6 -2.3 -1.3 -0.1 0.9 4.3 2.0 1.8 -4.4 0.6 2.9 0.3 0.2 -3.7 0.8 -2.0 -1.0 -0.9 1.5 -1.5 -0.1 2004 -1.5 -1.0 -2.7 -2.1 -2.9 -1.9 -1.4 1.0 1.9 -0.7 -1.5 -0.5 -0.5 -1.7 -0.4 0.8 -0.6 -1.1 1.3 -0.5 -1.8 -6.0 -1.4 -10.7 0.3 -2.7 -0.5 -1.2 -0.6 2005 -0.6 -0.7 -0.9 -1.7 0.0 -0.7 -1.6 -2.1 2.5 0.9 -0.9 -0.2 0.7 -0.9 4.2 -0.6 -2.4 1.3 -4.4 -2.8 -0.7 -2.3 1.0 8.8 -0.7 1.8 1.7 -0.7 0.4 2006 -1.1 -1.0 -0.5 -3.5 0.0 0.1 -2.0 0.4 0.0 -1.3 -0.9 -0.3 0.3 -2.3 4.9 3.4 -5.1 -1.9 -0.2 -1.1 -1.0 -2.5 -1.8 -5.1 -1.0 -1.4 -0.5 -2.4 -0.4 2007 -0.8 -0.9 -0.2 0.1 -0.5 2.4 -1.9 6.2 2.3 0.5 0.7 -0.9 -0.6 -3.4 5.8 -1.8 -2.0 -0.3 -2.8 -0.2 -0.9 -1.3 -2.0 1.5 -1.5 -0.9 -2.4 1.4 0.0 2008 0.8 1.5 2.4 3.7 3.2 2.8 1.3 8.4 7.5 2.8 2.4 0.3 1.8 -3.4 6.6 0.5 1.1 0.0 -0.4 0.6 0.9 4.3 1.9 6.6 1.8 1.1 3.9 -0.1 -0.7 2009 2.8 2.8 3.2 8.1 1.0 4.3 3.7 1.2 3.6 3.7 0.2 2.4 1.4 4.6 -5.6 0.9 7.0 -2.4 3.5 5.3 4.2 -2.0 2.7 -5.2 5.1 8.8 6.8 2.9 4.6 2010 -1.4 -1.3 -2.2 -2.1 0.2 -4.6 -1.5 -9.2 -2.4 -3.5 -2.5 -0.1 -0.8 -0.5 -8.5 -9.5 -5.5 -3.9 -5.9 -2.7 -0.9 -0.6 -2.3 -3.5 -0.1 -3.1 -3.5 -2.8 -0.8 -2.3 -1.3 0.5 0.1 7.8 5.7 -4.7 2.7 11.3 2.8 -5.9 1.5 3.5 -1.5 -0.3 -6.5 -6.1 -6.2 -3.1 -0.5 -1.6 -14.9 -1.4 -23.4 1.9 0.3 7.0 -2.9 2.4 compounded 2001-2010 2001-2007 -4.4 -4.1 -2.7 -8.8 3.2 3.4 -7.9 3.1 2.4 -0.1 -6.0 -1.1 1.1 -2.0 8.3 1.9 -8.1 0.0 -0.1 -3.5 -5.6 -16.3 -3.6 -21.5 -4.6 -5.9 -0.1 -2.9 -0.6 2008-2010 2.2 3.0 3.4 9.7 4.4 2.3 3.5 -0.4 8.7 2.9 0.0 2.6 2.4 0.5 -7.9 -8.2 2.2 -6.2 -3.0 3.1 4.2 1.6 2.2 -2.5 6.9 6.6 7.1 -0.1 3.0

EU-27 EURO BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK

0.2 -0.3 -1.5 -4.8 0.7 -2.4 1.3 -1.9 -2.9 : -0.6 -0.2 -1.4 -1.1 -6.6 -8.5 0.5 1.1 -4.3 -1.2 -1.6 -2.5 1.1 15.1 1.5 0.2 -2.0 3.7 1.7

Source: Eurostat, nominl unit labour (costnamq_aux_ulc, costnama_aux_ulc). Data seasonally adjusted for change on previous quarter. Data working-day adjusted for change on previous year. Annual data available at : http://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/dataset?p_product_code=NAMA_AUX_ULC Note: Euro Area refers to Euro Area consisting of 17 Member States

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1
2

All GDP figures are based on seasonally adjusted data.

For further information on interpretation and comparability of OECD Composite Leading Indicators (CLI), see the presentation section of the OECD CLI methodology document: http://www.oecd.org/dataoecd/26/39/41629509.pdf. For further information on the OECD, visit the website at: www.oecd.org.

The change in classification of economic activities, introduced in the business survey in May, led to a break in series. The results for May are based on NACE rev. 2, whereas data up to April 2010 are based on NACE rev. 1. Internal checks indicated that the changeover affected the level, making interpretation more difficult. This shift did not, on the whole, affect the direction of the change, but only its magnitude. The consumer confidence indicator and confidence in financial services are not subject to this changeover. For further information on the Business and Consumer Survey, visit the website at: http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm.
4 5

For further information on the Manpower Outlook, visit the website at: http://www.manpower.com/press/meos.cfm.

The BA-X is the most up-to-date and comprehensive job index in Germany and is based on actual vacancies reported by businesses. It shows the trend in labour demand in Germany, including demand on the primary labour market. The seasonally adjusted index includes unsubsidised vacancies reported to the BA for regular jobs covered by social security, reported jobs for freelances and self-employed people and vacancies communicated by private placement agencies. Note: In July the Federal Employment Agency changed its reporting system for vacancies, recalculating the series for reported jobs and BA-X (e.g. the June figure of 536 000 has been re-estimated at 370 000). For further information on the Monster Employment Index, visit the website at: http://about-monster.com/employment/index/17/45. For further information on Eurociett, visit the website at: www.eurociett.eu. For further information on MARKIT, visit the website at: http://www.markiteconomics.com/MarkitFiles/Pages/About.aspx.

6 7 8

Data in this report are based on an extraction from the ERM database on June 3rd 2011. Totals exclude World / EU cases in order to avoid double counting. As the database is continually updated in light of new information on recent cases, data reported here may not correspond exactly to later extractions. For more information, please visit the website: www.eurofound.europa.eu/emcc/erm/index.htm For more information on The Flash Eurobarometer see http://ec.europa.eu/public_opinion/flash/fl_319b_sum_en.pdf

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