Update quarter 4 - 2019: labour market continues to flourish
Figures from the second and the third quarter of 2019 gave reason to think the labour market was at a tipping point. From an employee perspective, it slightly declined from ‘very good’ to ‘good’. The labour market tightness seemed to decrease during this phase. In the fourth and final quarter of 2019, the labour market seems steady as ever, though green lights are not necessarily applicable to every aspect.
Generally we can speak of an exceptionally good labour market. The unemployment rate, after 7 months of gradual increase, has declined dramatically to just 302.000 people in December of 2019. A record number of people are working. The dynamics have also risen; within the Dutch labour force, nearly one in every five members found other work. Meanwhile, the labour market activity has seen a steady increase in comparison to last year’s statistics: every one of eight (12,5%) within the working population is actively seeking another job. Other positive signals include the drop of expected search duration of job seekers (they expect to find a job quicker than before) and an increasing number of flex-workers with a permanent contract on the horizon. This rise could potentially be attributed to the newly-introduced Balanced Labour Market Act.
Not just a pot of gold at the end of the labour market rainbow
A few figures, however, indicate that the labour market remains stuck in some ways: namely the pressure to source, which is declining. It is a good indicator with regards to the tight labour market in the Netherlands. This coincides with a decrease of the expected shortage of employment (CBS) and the figures stemming from the temporary employment sector (ABU). Those numbers indicate that it is not all sunshine and roses. Moreover - from a broader economic perspective - we see that a few numbers have declined when it comes to confidence and mood indicators, such as the consumer and producer confidence, the purchasers’ managing index (PMI), and the vacancy indicator of the CBS. That is why the historically large decline in the unemployment rate, measured by the CBS in December of 2019, is quite remarkable - to say the least.
Intelligence Group expects this for the first quarter of 2020:
- The numbers for the temporary employment sector will continue to worsen, largely due to the effects of new regulations in the Balanced Labour Market Act.
- The unemployment rate is expected to increase, due to the aforementioned drop that was just a bit too sudden and sharp, which resulted in flex-workers being left out after the BLMA was implemented.
- The labour market continues to flourish, partly due to less insecurity within the market now that Brexit has happened, which lead to a more relaxed sentiment with regards to the international economy.
Altogether, the Dutch labour market is in a strong position; its tightness will continue to be a factor. With the introduction of the Balanced Labour Market Act and a changing dynamic within the labour market, it remains exciting with regards to the development of the next few quarters.
More information can be found in the ‘labour market statistics’