Labour market

The year 2017 was characterized overall by a new growth in employment – concerning both absolute values and rate – which involved also young people aged 15-34. Moreover, the sharp drop in unemployed combined with the decrease in the number of inactive persons. On a short-term basis, the dynamics of the labour market emerged within an expansionary macroeconomic framework. In the fourth quarter of 2017 Italian economy experienced a GDP growth by 0.3% quarter on quarter and by 1.6% on an annual basis. Overall, the economy of Euro area countries grew by 0.6% compared to the previous quarter and by 2.7% on the same quarter of 2016. The growth, which was relevant for industry and construction, was associated with a further expansion of the labour input: the hours worked rose by 0.2% on the previous quarter and 1.6% on an annual basis in a context showing a slight growth in labour productivity in the short-term.

On the supply side, in the fourth quarter of 2017 employment grew slightly quarter over quarter (+12 thousand, 0.1%), due to the increase of fixed-term employees (+57 thousand, +2.0%), the downturn/fall of permanent workers (-25 thousand, -0.2%) and of self-employed (-20 thousand, -0.4%). The employment rate stood at 58.1%, a 0.1 percentage points increase compared with the previous quarter. The latest monthly data (January 2018), net of seasonal effect, reported a slight increase in the number of employed persons compared to December 2017. The year on year dynamics showed a growth of 279 thousand employed persons (+1.2% in a year) due to employees (+2.2%) – fixed-term ones in nearly nine out of ten cases – while self-employed reported a new decline (-1.9%). For the thirteenth consecutive quarter full-time employment increased, on the other hand part-time employed decreased after an uninterrupted growth that had started in 2010. On the basis of the flow of data, after twelve months, an increase of the passages from part-time to full-time was estimated, especially for people experiencing involuntary part-time. In the fourth quarter of 2017 the growth of employment and its rate for 15-34 year-olds was still going on. The increase in employment, although concerning all genders and territorial areas, was stronger for women and in the South and Islands.

The unemployment rate declined both in comparison with the previous quarter and with the previous year, while inactivity rate showed a decline compared to one year earlier and a slight increase relative to the previous quarter. Data for January 2018 reported a growth in unemployment rate combined with the reduction of inactivity rate, on a short term basis.

The year over year comparison showed for the third consecutive quarter the decrease in unemployment (-247 thousand in a year) that involved both genders and was particularly significant for young people. The reduction, albeit less intense, for the inactive aged 15-64 (-118 thousand in a year) was due exclusively to those who are available for work (the potential labour force).

Considering flow data the entry in employment increased, solely towards the fixed-term employees component; the increase regarded young people, women and particularly the residents in the South and Islands and individuals with high level of education. Transitions from inactivity into unemployment, especially for potential labour force, grew as well.

In enterprise data short-term signs of growth of labour demand were confirmed, with an increase in employee jobs by 0.5% on the previous quarter and by 3.0% year-on-year, derived from the growth both in industry and services. Also per capita hours worked increased both relative to the previous quarter (+0.5 %) and to the previous year (+0.8%), whereas the decrease in the use of the short-time working allowance hours continued. The vacancy rate, even though stable compared with the previous quarter, increased by 0.2 percentage points year-on-year. Wages remained stable over the previous quarter and showed a slight year-on-year growth (+0.1%). Social security contributions increased by 0.1% on a short-term basis and by 0.9% on a yearly basis. As a result, the cost of labour increased by 0.1% compared to the previous quarter and by 0.3% compared to the same quarter of the previous year.