Monthly Bulletin July 2009 - Banque de France

ECONOMIC
AND MONETARY
DEVELOPMENTS
Output,
demand and the
labour market
Chart 27 Industrial production growth and
contributions
Chart 28 Industrial production, industrial
confidence and the PMI
(growth rate and percentage point contributions; monthly data;
seasonally adjusted)
capital goods
consumer goods
intermediate goods
energy
total excluding construction
(monthly data; seasonally adjusted)
industrial production 1) (left-hand scale)
industrial confidence 2) (right-hand scale)
PMI 3) (right-hand scale)
3.0
0.0
-3.0
-6.0
-9.0
2004 2005 2006 2007
2008
3.0
0.0
-3.0
-6.0
-9.0
3
2
1
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
2004 2005 2006 2007
2008
12
8
4
0
-4
-8
-12
-16
-20
-24
-28
-32
-36
-40
Sources: Eurostat and ECB calculations.
Notes: Data shown are calculated as three-month moving
averages against the corresponding average three months earlier.
Data refer to the euro area including Slovakia.
Sources: Eurostat, European Commission Business and Consumer
Surveys, Markit and ECB calculations.
Notes: All series refer to manufacturing. Data refer to the euro
area including Slovakia.
1) Three-month-on-three-month percentage changes.
2) Percentage balances; changes compared with three months
earlier.
3) Purchasing Managers’ Index; deviations from an index value
of 50.
LABOUR MARKET
Conditions in euro area labour markets have continued to deteriorate in recent months. According
to Eurostat’s first estimate, euro area employment decreased by 0.8% quarter on quarter in the
first quarter of 2009, marking the third consecutive quarterly decline (see Table 6). The drop in
employment in the first quarter reflected a steeper decrease in employment in the industrial sector
together with negative employment growth in the services sector.
Looking ahead, the latest business surveys point to a further deterioration in employment in the
second quarter of 2009 (see Chart 29). In June the PMI index of employment intentions remained
at very low levels for both the industrial and services sectors. The latest surveys on employment
intentions by the European Commission suggest a similarly bleak outlook for employment.
As a result of the sharp fall in activity, labour productivity (in terms of output per employee)
declined substantially in the first quarter of 2009, falling by 1.7% quarter on quarter (see Chart 30).
The sharp decline in labour productivity in the first quarter reflected marked falls in industry (with
the exception of construction, where labour productivity rose, following a sharp contraction in
employment) and services. It is worth emphasising that this development in labour productivity was
partly driven by a strong reduction in hours worked per employee. Several euro area countries have
made use of short-time working schemes and other measures to mitigate the effects of the economic
contraction (see the box entitled “Labour market adjustments during the current contraction of
economic activity” in the June 2009 issue of the Monthly Bulletin). However, productivity also fell
ECB
Monthly Bulletin
July 2009
53