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Gross domestic product (GDP) fell by an annual rate of -0.6% in the European Union during the last three months of the year, according to new estimates by the EU’s statistics office. In the Euro countries, GDP was down by -0.9% on the prior year.
The staffing industry’s cyclical nature is closely linked to economic performance and proves to be an important indicator as to how the labour and recruitment markets are faring. The new assessment from Eurostat confirms that Europe was in recession at the end of 2012 although this comes as no surprise given the latest quarterly results being announced by major staffing firms.
Many international staffing firms have blamed weak macro-economic conditions for their often poor performance in many European countries.
Last month, Randstad reported a -15% fall in fourth-quarter revenue for its Portuguese and Spanish businesses. And these countries posted some of the sharpest falls in GDP with Portugal registering a year-on-year decline of -3.8% during the quarter. Spain’s economy meanwhile contracted by -1.9% in the period.
The staffing markets in France and Belgium have also been hit by weak client demand with the statistics showing that GDP fell by -0.3% and -0.4% respectively during the fourth quarter. ManpowerGroup is now “on guard” after revenue in France, its most important single market, declined by -9% during the quarter while its Belgian business posted a -7% drop in sales.
Adecco, the world’s largest staffing company does not report its Q4 results until next week (13 March).
It is not all bad news, however, as some countries showed some resilience in the tough economic times. Germany and Sweden, for instance, posted GDP growth of +0.4% and +1.5% respectively during the fourth quarter. Staffing Industry Analysts research subscribers can view the latest forecasts for European staffing markets here.