Update labour market second quarter 2020
Of course, unemployment has risen and employment has fallen, but the effect of the corona crisis on the supply side of the labor market is still limited. Many young and flexible workers lost their jobs, but many also found new work quickly. The biggest (behavioral) change we see so far in the labor market activity: fewer people are actively looking for (other) jobs. On the demand side, there is currently more volatility, which is reflected, for example, in a significant drop in the number of vacancies.
• The labour market activity, the extent to which the Dutch working population is actively seeking a job, has decreased (-49 thousand) in comparison to last quarter. Compared to the same quarter in 2019, we see an even bigger decrease (-78 thousand). Even though there is an increase in people looking for a different job because unemployment is rising, at the same time people with a job (by far the largest group) have become less active. Just under one in nine people in the Dutch working population (11.5%) are actively looking for a new job. The decrease in the active part benefits the group that is not looking for (other) work at all (40.4%). The latent part (48.1%) remained the same.
• We see a mixed picture of the number of job changes. Compared to last year, the 19.5% who found an other/new job means a slight increase (+15 thousand), but compared to last quarter there is a slight decrease (-16 thousand). As a result of the covid-19 crisis, many young people in particular have lost their jobs, but most of them have quickly found other jobs. With a longer period of declining economic growth (or contraction) and rising unemployment, the number of job changes is likely to decrease. There are fewer job openings and mobility is decreasing (the aforementioned declining labor market activity among workers).
• Remarkably, the sourcing pressure in the second quarter increased slightly compared to the previous quarter (from 31.9% to 32.1%). There was a slight decrease compared to the second quarter of 2019 (32.4%). Almost one in three people from the Dutch workforce was approached at least once per quarter by an employer or agency for a new job. The sourcing pressure is an important indicator of scarcity on the Dutch labour market.
• Unemployment has risen as a result of the covid-19 crisis, especially in June. Nevertheless, the unemployment rate is still low at 4.3%. Unemployment is likely to continue to rise in the coming months, despite all government emergency and support measures. In its most recent forecast (June estimate 2020), the CPB foresees an increase in unemployment to 4.8%. That is approximately 130 thousand people more unemployed than in 2019. In 2021, unemployment can rise even further to even 7.0% (comparable to the end of 2014 / early 2015).
• It is remarkable that the expected search duration for a new job has decreased again. This search period is based on the period that people themselves indicate that they need to find new work. It can be seen as a confidence indicator of employees in the labour market. Low unemployment in the second quarter, high sourcing pressure and government support measures may still be grounds for optimism among employees and job seekers.
• The proportion of flex workers who expect to obtain a permanent contract at the end of their current flexible contract fell in the second quarter. Nevertheless, the percentage (38.4%) is still high compared to previous years. The share of job finders who immediately got a permanent contract has also decreased, after a significant increase in the first quarter (probably as a result of the introduction of the Balanced Labour Market Act). ). Despite the slight decrease, almost four in ten track finders immediately got a permanent contract in the second quarter.
• In 2019, more than 1.2 million new vacancies arose according to the CBS. Never before so many new vacancies have arisen in one year. The vacancy rate (the number of vacancies compared to the number of employee jobs) also reached a new record with 14.8%. Even in 2007 - just before the crisis - the vacancy rate was not as high (14.3%), while the economy grew by 3.8% that year, employment increased by 2.9% and unemployment by 4.2% was very low. The most recent forecast by the CPB about the impact of the corona crisis on the Dutch economy (June estimate 2020) has been calculated in our vacancy model. The number of vacancies is expected to fall sharply in 2020. The expected 650 thousand vacancies means almost a halving compared to the nearly 1.3 million vacancies in 2019. For 2023, the 'normal growth path' is assumed (1.5 percent economic growth, 4.3% unemployment). In this forecast, the year 2022 is seen as a 'transition year'.
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