The labour market

In the second quarter of 2016, in the context of a general slowdown in global economic growth, the Italian economy suffered a setback. GDP remained unchanged over the previous quarter and marked a 0.8% increase in trend terms. In this context, use of labour continued to grow: total hours worked went up by 0.5% over the previous quarter and 2.1% year-over-year. This increase involved both industry, excluding construction, (+0.4%) and services (+0.6%).

On the labour supply side, in the second quarter of 2016 total employment grew at a steady rate over the previous quarter (+0.8%, 189,000 units) showing positive, albeit different, dynamics among the various types of employment: permanent employees (+0.3%), temporary employment (+3.2%), self-employed (+1.2%). At the regional level, this growth was more marked in the South and Islands (+1.4%) than in the Centre (+0.8%) and the North (+0.6%). The employment rate went up by 0.5 points, especially in the 15-34 age group (+0.8 points) and the 50-64-year-olds (+0.6 points). Most recent trends measured on seasonally adjusted monthly data and referred to July 2016, marked the end of the positive trend recorded in the previous four months: the number of self-employed workers dropped, while that of employees remained broadly stable.

The year-on-year dynamics arisen between the second quarter of 2016 and the same quarter of the previous year led to a total growth of 439 thousand employed persons on an annual basis, with a significant increase among young people aged 15-34 (+223 thousand year-over-year), in addition to the continuing increase among the over 50. The increase was more marked for employees, both permanent (+308 thousand), and temporary (+72 thousand), but also for self-employed with no employees. Both full- and part-time jobs, especially the voluntary ones, registered a relevant increase. Employment also increased for women (+180 thousand), especially in the North area.

The decline, both on a quarterly and on an annual basis, of the inactive (in absolute terms and as incidence) continues at a faster pace, especially for the discouraged component. The unemployment rate, after the short-term stability of the two previous quarters, slightly decreased (-0.1 points) compared to the previous quarter and by 0.6 points over the same quarter of 2015 with a trend decline of 109 thousand unemployed persons y-o-y.

The increased participation of young people in the labour market is also witnessed by the trend decrease (-252 thousand) in the number of people Not in Education, Employment or Training (Neet).

Stock changes in employment implicated significant changes in people’s conditions in the labour market, measured by flow data after twelve months. Transitions to permanent jobs of employed persons increased particularly for temporary employees and para-subordinate workers. Moreover the flow from unemployment to employment increased, mostly towards permanent jobs. Transitions from unemployment to employment mostly increased for men, young people aged 25-34, for residents in the Centre and North and graduates.

As for enterprises, labour demand continued to grow over the previous quarter, although at a slower pace, with a modest increase both in employee jobs and in hours worked per capita and with a reduction in the use of short-time working allowance hours payments. Employment growth is mainly due to industry (excl. constructions) stability and increase in services; job vacancy rate decreased by 0.1 percentage points over the previous quarter and was stable year-over-year. As for labour costs, the reduction of social security contributions slowed down (-0.1%), as a result of lower contributions being paid for new permanent hirings.