European Labour Market Barometer: second damper in a row, but still at a high level
In August, the European Labour Market Barometer fell for the second time in a row, dropping by 0.3 points in comparison with last month to a total of 104.3 points. However, that still means that the labour market leading indicator of the European Network of Public Employment Services and the Institute for Employment Research (IAB) remains at a high level.
“The European labour markets are still on their way to recovery. However, the risks of increasing numbers of infections in autumn have put a bit of a damper on the prospects again,” reports Enzo Weber, head of the IAB forecast division “Forecast and Macroeconomic Analysis”. The outlook in several participating countries has deteriorated: the labour market leading indicator fell significantly in Cyprus, Bulgaria, Switzerland, the Czech Republic, Poland and Belgium-Flanders.
The sinking optimism can be seen in the expectations regarding the growth of unemployment. The European Labour Market Barometer’s sub-indicator for the development of unemployment figures fell by 0.7 points – starting from an especially high level – and stands at 104.7 points in August. The outlook regarding employment, on the other hand, remains stable. The sub-indicator for future employment growth rose slightly by 0.1 point to 104.0 points.
The European Labour Market Barometer is a monthly leading indicator based on a survey of the local or regional employment agencies in 17 participating public employment services. The survey has been carried out jointly by the employment services and the IAB since June 2018. The participating countries include Austria, Bulgaria, Cyprus, the Czech Republic, Denmark, Belgium-DG, Belgium-Flanders, Germany, Iceland, Liechtenstein, Lithuania, Luxembourg, Malta, Poland, Portugal, Switzerland and Belgium-Wallonia. While component A of the barometer signals the development of the seasonally adjusted unemployment figures for the next three months, component B forecasts employment trends. The average of the components „unemployment“ and „employment“ constitutes the total value of the barometer. This indicator thus provides an outlook on the overall development of the labour market. The scale ranges from 90 (very poor development) to 110 (very good development). First, a barometer score for each of the participating employment services is determined. The European barometer is then derived from these national scores in the form of a weighted average.