RENTRÉEECONOMIC OUTLOOK
September 2017
« TIGHTENING LABOUR MARKETCHALLENGES ECONOMIC GROWTH »
WORLD ECONOMYUNITED STATES STILL ON TRACKCONCERNS OVER CHINA, EMERGING COUNTRIES FOLLOWING IN ITS WAKEPOSITIVE SIGNS COMING FROM EUROPE
BELGIAN ECONOMYCONTINUING GDP-GROWTHCONFIDENCE INDICATORS AT A HIGH LEVELINCREASED DYNAMICS IN A TIGHTENING LABOUR MARKET
CONCLUDING REMARKS FOR FEDERGON MEMBERS
ECONOMIC OUTLOOK ‘RENTRÉE’
WORLD ECONOMY
IMF in its most recent study (July 2017)
“GLOBAL GROWTH IS PROJECTED TO GROW 3.5% IN 2017 & 3.6% IN 2018.”
“THE CYCLICAL RECOVERY CONTINUES.”
2016 2017 2018USA 1.7 2.0 1.9Euro Area 1.8 1.9 1.7Japan 1.0 1.3 0.6UK 1.8 1.7 1.5Russia -0.2 1.4 1.4China 6.7 6.7 6.4India 7.1 7.2 7.7World 3.2 3.5 3.6
MODERATE PREDICTIONS FOR GLOBAL GROWTH
Realised & estimated economic growth (in %) (IMF)
UNITED STATES: THE WORLD’S LEADING ECONOMY STILL ON TRACKMOST ECONOMIC INDICATORS ARE POSITIVE
U.S. GROWTH PROJECTIONS ARE A BIT LOWER THAN IN APRIL: primarily reflecting that the fiscal stimulus by president Trump will be less expansionary than announced.
FED LEAVES MONETARY POLICY STEADY: the FED considered near-term risks to the economic outlook as roughly balanced, but said it will closely monitor inflation.
The labour market has continued to strengthen and the economic activity has been rising moderately so far this year.
• solid job gains, • unemployment rate below the longer-term average, • household spending and business fixed investment have continued to expand.
So wages may rise.
GDP Growth:
+2.6% (Q2 yoy)
CHINA: GROWTH AT ITS STRONGEST LEVEL SINCE Q3 2015! INDUSTRIAL OUTPUT and RETAIL SALES (+11% yoy) picked up while FIXED-ASSET INVESTMENT remained strong.
GOVERNMENT SPENDING rose 15.8 percent in the first half of 2017 (yoy) in order to meet the target of doubling the 2010 real GDP by 2020.
EXPORTS increased by 11.3 percent year-on-year, supported by firmer global demand.
Regarding PROPERTY SECTORS, Beijing is trying to control debt and prevent a housing bubble with tough measures.
GDP Growth:
+6.9% (Q2 yoy)final consumption63%
investment33%
net exports4%
C O N T R I B U T I O N T O C H I N E S E G D P G R O W T H I N 1 S T H A L F O F 2 0 1 7
EUROPE: GROWTH FIGURES ARE BETTER THAN EXPECTEDGROWTH PROJECTIONS FOR 2017 REVISED UP e.g. in France, Germany, Italy and Spain reflecting stronger momentum in domestic demand than previously anticipated (especially boosted by fixed investmentand household consumption).
But: DIVERGING GROWTH FIGURES in the Member States (Q1 - 2017) (Q/Q-4)
BENEFITING from: cheap oil (once more)low inflationlow interest ratesan active ECB a strong domestic market (Consumption & Investment).
6,13,2
3,02,9
2,52,1
1,71,5
0,8
IrelandNetherlands
SpainGermany
AustriaItaly
BelgiumFranceGreece
GDP Growth:
+2,1% (Q2 yoy)
EUROPE: THE € EXCHANGE RATE !Compared to the $, the € has STRENGTHENED in real effective terms since March because of increased confidence in the euro area recovery and a decline in political risk.
As long as global growth remains solid, the impact of a stronger € on the exports is limited.
0,6
0,8
1
1,2
1,4
1,6
1€ = $ or £?
$
£
THE BRITISH RECRUITMENT & EMPLOYMENT CONFEDERATION (REC)
ON THE BREXITTHE LABOUR MARKET HEAVILY RELIES ON EU-NATIONALS …
The UK has labour, skill and talent shortages and the evidence points to the situation getting worse before it gets better.
EU nationals= 7% of total UK labour forcemanufacturing (11%), retail and hospitality (9%) and construction (8%)
The proportion of EU workers is even higher in specific industries like food processing (33% of the workforce), domestic personnel (26%) warehousing (18%)
EU nationals make up 17% of the workforce in London. The financial & business service sector is the largest employer of EU nationals in the capital with 16% of the workforce (191,400 employees).
UK relies on people from abroad and needs an immigration system based on this reality.
COMMODITIES AND INFLATION
WHAT AND WHY?
OIL PRICES HAVE RECEDED AGAIN after a small rise in the beginning of the year, reflecting strong inventory levels in the United States and a pickup in supply.
HEADLINE INFLATION also generally softened as the impact of the commodity price rebound in the second half of 2016 faded, and remains at levels well below central bank targets in most advanced economies.
CORE INFLATION has remained broadly stable. It has largely been stable in emerging economies as well.
If cheap oil is caused by excess supply, like now, it is the equivalent of a tax cut for Western consumers.« »
RISKS FOR THE WORLD ECONOMYA MORE PROTRACTED PERIOD OF POLICY UNCERTAINTYLess election-related risks, but policy uncertainty remains at a high level and could well rise further, reflecting - for example - difficult-to-predict U.S. regulatory and fiscal policies, negotiations of post-Brexit arrangements, or geopolitical risks (the North-Korean crisis). This could harm confidence, deter private investment, and weaken growth.
FINANCIAL TENSIONSChina: failure to continue the recent focus on addressing financial sector risks and curb excessive credit growth could entail an abrupt growth slowdown.U.S.: a faster-than-expected monetary policy normalization in the U.S. could tighten global financial conditions and trigger reversals in capital flows to emerging economies.Europe: In some euro area countries, weak bank balance sheets and an unfavorable profitability outlook could interact with higher political risks to reignite financial stability concerns.
INWARD-LOOKING POLICIESOver the longer term: failure to lift potential growth and make growth more inclusive could fuel protectionism and hinder market-friendly reforms.
BELGIUMImproving economic indicators
BELGIAN ECONOMY: 17TH CONSECUTIVE QUARTER OF POSITIVE GROWTH
PREDICTIONS2017: 1.6% (revised upwards) 2018: 1.6% 2019: 1.5%
WHAT ARE THE MAIN DRIVERS OF THE ECONOMIC GROWTH? Growth will be driven by domestic demand in the coming
years due to:• higher labour income • lower personal income taxes (both resulting from the
tax shift operation)• the strong rise in dividends.
The growth is still supported to a significant degree – and more than in other countries – by the expansion of investment.
* Q3 ‘14/Q3 ‘13 = +0,9% | Source: NBB
0,2%
0,4% 0,4%
0,5%
0,4%
0,3% 0,3%
0,4%
0,6%
0,1%
0,5%
0,1%
0,5%
0,1%
0,4%
0,6%
0,4%
0,0%
0,1%
0,2%
0,3%
0,4%
0,5%
0,6%
0,7%
2013
Q2
2013
Q3
2013
Q4
2014
Q1
2014
Q2
2014
Q3
2014
Q4
2015
Q1
2015
Q2
2015
Q3
2015
Q4
2016
Q1
2016
Q2
2016
Q3
2016
Q4
2017
Q1
2017
Q2
GDP(Chain linked - Q/Q-1)
0,4%
0,6%
0,0%
-0,1%
-6,6%
2,4%
1,3%
1,2%
1,1%
0,5%
-0,1%
-0,5%
GDP
Services
Industry except construction
Construction
Agriculture and forestry and fishing
Corporate investment
Imports
Public investment
Exports
Private consumption
Public consumption
Investment in housing
COMPONENTS OF BELGIAN GDP-GROWTH (Q/Q-1)
Source: NBB
Gro
ss v
alue
ad
ded
by
indu
stry
Mai
n ca
tego
ries
of e
xpen
ditu
re o
f G
DP
GDP
REGIONAL OUTLOOK
Source: www.plan.be
GDP GROWTH 2016-2018 2019-2022
BELGIUM +1.5% +1.5%
BRUSSELS +1.1% +1.3%
FLANDERS +1.7% +1.6%
WALLONIA +1.3% +1.3%
EMPLOYMENT 2014-2016 2019-2022
BELGIUM +1.2% +0.8%
BRUSSELS +1.0% +0.5%
FLANDERS +1.3% +0.9%
WALLONIA +1.0% +0.7%
ECONOMIC GROWTH PROJECTIONS FOR FLANDERS ARE SLIGHTLY HIGHER THAN FOR WALLONIA & BRUSSELS.
AS A RESULT NET JOB CREATION WILL BE BIGGER IN FLANDERS THAN IN THE OTHER REGIONS.
Flanders: +211.000 (cumulated for 2016-2022)
Wallonia: +75.000 (cumulated for 2016-2022)
Brussels: +36.000 (cumulated for 2016-2022)
http://www.plan.be/
0,50
1,00
1,50
2,00
2,50
3,00
3,50
%
consumption index health index
INFLATION RATE: IMPORTANT DOWNWARD REVISION
NO FURTHER IMPACT ON WAGES IN 2017 AND 2018?
The pivotal index was crossed in May 2017. According to the monthly
forecasts for the 'health price index', the pivotal index for public
wages and social benefits should not be exceeded by the ‘smoothed
health index’ in 2017 or in 2018.
INFLATION PROJECTIONS JULY ’17
The strong downward revision of inflation forecasts in 2018 is due
to the withdrawal of the ‘contribution to the Energy Fund’ (*) in
the Flemish Region from January 2018 onwards. Possible
replacement measures are not taken into account at this stage.
The average consumer price index: 2.0% in 2017 and 1.2% in 2018
The average 'health price index’(**): 1.7% in 2017 and 1.1% in 2018
(*) the so-called ‘Turtel-taks’
(**) used for the automatic indexation of wages, social benefits and house-rent
Source: Planbureau
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
1 |
2007
3 |
2007
5 |
2007
7 |
2007
9 |
2007
11 |
200
71
| 20
083
| 20
085
| 20
087
| 20
089
| 20
0811
| 2
008
1 |
2009
3 |
2009
5 |
2009
7 |
2009
9 |
2009
11 |
200
91
| 20
103
| 20
105
| 20
107
| 20
109
| 20
1011
| 2
010
1 |
2011
3 |
2011
5 |
2011
7 |
2011
9 |
2011
11 |
201
11
| 20
123
| 20
125
| 20
127
| 20
129
| 20
1211
| 2
012
1 |
2013
3 |
2013
5 |
2013
7 |
2013
9 |
2013
11 |
201
31
| 20
143
| 20
145
| 20
147
| 20
149
| 20
1411
| 2
014
1 |
2015
3 |
2015
5 |
2015
7 |
2015
9 |
2015
11 |
201
51
| 20
163
| 20
165
| 20
167
| 20
169
| 20
1611
| 2
016
1 |
2017
3 |
2017
5 |
2017
7 |
2017
Consumentenvertrouwen | La confiance des consommateurs | Consumer ConfidenceOndernemersvertrouwen | La confiance des chefs d'entreprise | Business Confidence
Since the beginning of this year, Belgian business and consumer confidence have both been close to or at their highest level in six years, and well above the long-term average.
THE CONFIDENCE INDICATORS STABILISE IN 2017
Source: NBB
SMALL BUT CONTINUING INCREASE OF EMPLOYMENT0,
5%0,
4%0,
5%0,
0%-0
,3%
-0,3
%-0
,1%
0,2%
0,1%
0,3%
0,4%
0,3%
0,4%
0,4%
0,2%
0,1%
0,1%
0,1%
0,0%
-0,1
%-0
,2%
-0,2
%0,
1% 0,1
%0,
1%0,
2%0,
1%0,
3%0,
2%0,
3%0,
3%0,
2% 0,3%
0,5%
0,5%
0,1%
0,3%
0,2%
2008
Q1
2008
Q3
2009
Q1
2009
Q3
2010
Q1
2010
Q3
2011
Q1
2011
Q3
2012
Q1
2012
Q3
2013
Q1
2013
Q3
2014
Q1
2014
Q3
2015
Q1
2015
Q3
2016
Q1
2016
Q3
2017
Q1
Employment (total growth (Q/(Q-1))
Source: NBB
0,2%
-0,5%
-0,2%
-0,2%
-0,1%
0,0%
0,1%
0,2%
0,5%
0,6%
0,7%
0,8%
Total economy
Agriculture
Information & communication
Financial & insurance
Public & Education
Wholesale & retail trade,…
Industry
Construction
Entertainment & recreation
Human Health & social work
Real estate
Science, tech & administration
Employment growth Q2 2017 (Q/(Q-1))
JOB CREATION IN BELGIUM SINCE 2008 EMPLOYMENT IN BELGIUM HAS NEVER BEEN AS HIGH AS TODAY, BUTSITUATION DIFFERS BETWEEN SECTORS!
Source: NBB
84889296
100104108112116120124128132136
Agriculture and forestry and fishing Industry Construction Wholesale and retail trade, transportInformation and communication Financial & insurance Real estate Science, tech & administrationPublic & Education Human health and social work Entertainment and recreation
Source: Hoge Raad voor de Werkgelegenheid - Conseil supérieur de l'emploi
HIGH EMPLOYMENT INTENSITY OF GROWTH
Increase to 0.66 on average between 2011 and 2016: a y-o-y GDP-growth of
1% leads to a 0.66% rise in employment.
(> than the European average and the 3 neighbour countries)
Explanations?
• Slowdown of the productivity gains
• Gradual shift towards a service economy which is characterized by a
lower productivity and an higher employment intensity than the
industry.
• Job creation supported by a wage restraint policy and structural
reforms that increase labour supply. 0,05 0,09
0,26
0,53
0,66
1971-1980 1981-1990 1991-2000 2001-2010 2011-2016
Employment intensity of growth =
𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑒𝑒𝑜𝑜 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝐺𝐺𝐺𝐺𝐺𝐺 𝑔𝑔𝑔𝑔𝑒𝑒𝑔𝑔𝑒𝑒𝑔
GROWING IMPACT OF WAGE MODERATION BYGOVERNMENT
The Belgian Government continues in its efforts to lower the cost of labour
Apparently, our labour cost isn’t growing as fast as in our neighbour countries
Source: Eurostat
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1
Labour cost index % change Q/Q-4
Euro area (19 countries) EU (28 countries) Belgium GermanyFrance Netherlands United Kingdom
STRONG RISE IN JOB OFFERS BUT NOT IN BRUSSELS(PLACED IN PES)
Source: RVA
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
90 000
100 000
2007
/Q1
2007
/Q2
2007
/Q3
2007
/Q4
2008
/Q1
2008
/Q2
2008
/Q3
2008
/Q4
2009
/Q1
2009
/Q2
2009
/Q3
2009
/Q4
2010
/Q1
2010
/Q2
2010
/Q3
2010
/Q4
2011
/Q1
2011
/Q2
2011
/Q3
2011
/Q4
2012
/Q1
2012
/Q2
2012
/Q3
2012
/Q4
2013
/Q1
2013
/Q2
2013
/Q3
2013
/Q4
2014
/Q1
2014
/Q2
2014
/Q3
2014
/Q4
2015
/Q1
2015
/Q2
2015
/Q3
2015
/Q4
2016
/Q1
2016
/Q2
2016
/Q3
2016
/Q4
2017
/Q1
2017
/Q2
Flanders Wallonia Brussels+14.1% +19.5% -4,9%Q/Q-4:
1,9%
3,3%3,1%
2,7% 2,7% 2,6%2,4% 2,3% 2,2% 2,2% 2,1% 2,1% 2,0%
1,8%1,6% 1,6% 1,5%
1,3% 1,2% 1,2%1,0% 1,0% 1,0% 1,0%
0,9%0,8%
EU (2
8 co
untr
ies)
Belg
ium
Czec
h Re
publ
icFi
nlan
dSw
eden
Germ
any
Uni
ted
King
dom
Net
herla
nds
Croa
tiaAu
stria
Slov
enia
Nor
way
Esto
nia
Latv
iaLi
thua
nia
Form
er…
Luxe
mbo
urg
Rom
ania
Cypr
usSw
itzer
land
Bulg
aria
Irela
ndGr
eece
Slov
akia
Port
ugal
Spai
n
Source: NBB
JOB VACANCY RATE REFLECTS MALFUNCTIONING & TIGHTENING OF THE BELGIAN LABOUR MARKET
IT REFLECTS THE UNMET DEMAND FOR LABOUR, AS WELL AS POTENTIAL
MISMATCHES BETWEEN THE SKILLS AND AVAILABILITY OF THOSE WHO ARE
UNEMPLOYED AND THOSE SOUGHT BY EMPLOYERS.
Source: Eurostat
1,9
3,3
Evolution of the job vacancy rate
European Union (28 countries) Belgium
Job vacancy rate = 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣 𝑝𝑝𝑝𝑝𝑝𝑝𝑣𝑣𝑝𝑝𝑝𝑝𝑣𝑣𝑣𝑣𝑜𝑜𝑝𝑝𝑜𝑜𝑜𝑜𝑜𝑜+𝑜𝑜𝑣𝑣𝑝𝑝𝑣𝑣𝑣𝑣𝑜𝑜𝑝𝑝𝑜𝑜𝑜𝑜𝑜𝑜 𝑝𝑝𝑝𝑝𝑝𝑝𝑣𝑣𝑝𝑝
Source: NBB
SCARCITY: JOB VACANCY RATE BY NACE (BELGIUM – Q2 2017)
Source: Eurostat
1,3%1,8%
2,4%2,4%
2,6%2,6%
2,9%3,0%
3,3%3,3%
3,4%3,5%3,5%
4,1%4,7%
5,7%6,8%
8,2%
P - EducationQ - Human health and social work activities
K - Financial and insurance activitiesD - Electricity, gas, steam and air conditioning supply
O - Public administration and defence; compulsory social securityS - Other service activities
L - Real estate activitiesE - Water supply; sewerage, waste management and remediation activities
G - Wholesale and retail trade; repair of motor vehicles and motorcyclesH - Transportation and storage
C - ManufacturingR - Arts, entertainment and recreation
I - Accommodation and food service activitiesN - Administrative and support service activities
B - Mining and quarryingF - Construction
J - Information and communicationM - Professional, scientific and technical activities
… and the HR service providers ?
THE FEDERGON TAW-INDEX INCREASES STEADILY
264,1
241,1
274,9
01-0
7
04-0
7
07-0
7
10-0
7
01-0
8
04-0
8
07-0
8
10-0
8
01-0
9
04-0
9
07-0
9
10-0
9
01-1
0
04-1
0
07-1
0
10-1
0
01-1
1
04-1
1
07-1
1
10-1
1
01-1
2
04-1
2
07-1
2
10-1
2
01-1
3
04-1
3
07-1
3
10-1
3
01-1
4
04-1
4
07-1
4
10-1
4
01-1
5
04-1
5
07-1
5
10-1
5
01-1
6
04-1
6
07-1
6
10-1
6
01-1
7
04-1
7
07-1
7
Source: NBB
OTHER FEDERGON-SECTORS
Activity Evolution first half of 2017Services to individuals Worked hours +2.4%
Projectsourcing Worked hours +7.7%
Interim Management Assignments -0,6%
Training & Development Turnover -2.2%
Recruitment, Search & Selection
Turnover +6.2%
Outplacement Guidances -6.0%
Temporary agency work Worked hours +4.7%
Meer infoPlus d’infos
http://federgonbe.webhosting.be/sites/default/files/custom/uploads/kwartaalrapport_q2_2017.pdfhttp://federgonbe.webhosting.be/sites/default/files/custom/uploads/rapport_trimestriel_q2_2017.pdf
THE CONTINUING BUT MODERATE ECONOMIC GROWTH, CHARACTERIZED BY A QUITE HIGHJOB INTENSITY, RESULTS IN A STEADY NET EMPLOYMENT GROWTH, ESPECIALLY IN PROFITMAKING SECTORS. MOREOVER, THE DEMOGRAPHIC PRESSURE DRIVES THE REPLACEMENTDEMAND IN A LOT OF COMPANIES AND SECTORS.
THE MISMATCH PROBLEM AND LABOUR SHORTAGES ARE BACK IN THE FOREFRONT, TOSUCH AN EXTENT THAT THE ECONOMIC GROWTH REMAINS BELOW ITS POTENTIAL. THISALSO APPLIES TO THE GROWTH IN THE FEDERGON-SECTORS, WHICH IS INCREASINGLYCHALLENGED BY THE TIGHTENING LABOUR MARKET, THE IMPACT OF WHICH DIFFERS,NEVERTHELESS, BETWEEN GEOGRAPHIC AREAS AND JOB FUNCTIONS.
THE ECONOMIC OUTLOOK IN THE SHORT & MEDIUM TERM REMAINS POSITIVE. THECHALLENGE IS STILL TO FIND CREATIVE AND INNOVATIVE SOLUTIONS FOR HR PROBLEMS INCLIENT COMPANIES. ANYHOW, THE PUBLIC AUTHORITIES CAN PLAY A FACILITATING ROLE,NAMELY CONTINUE THE FOCUS ON ACTIVATION OF THE LABOUR RESERVE THROUGH ACLOSER CONTROL OF THE AVAILABILITY OF THE UNEMPLOYED AND RELENTLESS EFFORTS INTRAINING AND GUIDANCE.
CONCLUDING REMARKS
RESEARCH & ECONOMIC AFFAIRS DEPARTMENT
PAUL VERSCHUEREN / FREDERIEK DE KIMPE
Havenlaan 86c/302 - 1000 BrusselAvenue du Port 86c/302 - 1000 BruxellesTel: 02/203 38 03 Fax: 02/203 42 68
CONTACT
mailto:[email protected]
Slide Number 1Slide Number 2Slide Number 3Slide Number 4Slide Number 5Slide Number 6Slide Number 7Slide Number 8Slide Number 9Slide Number 10Slide Number 11Slide Number 12Slide Number 13Slide Number 14Slide Number 15Slide Number 16Slide Number 17Slide Number 18Slide Number 19Slide Number 20Slide Number 21Slide Number 22Slide Number 23Slide Number 24… and the HR service providers ?Slide Number 26Slide Number 27Slide Number 28Slide Number 29