Job market is weakening again
Economic growth has come to a grinding halt and many countries in the Eurozone, Belgium included, are suffering a mild recession. The debt crisis and subsequent fierce austerity measures have caused much uncertainty among European businesses. If the downward spiral should continue, the interdisciplinary centre for work and social economy, WSE, at the University of Leuven fears the recovery in the job market, which has not finished yet, may stop once again. During the past eighteen months the Flemish job market saw a recovery in the wake of European economic recovery which was set in motion late in 2009, a number of job market indicators show. The evolution of temporary lay-offs is the most striking sign of the turnaround. Until January 2010 it experienced a spectacular increase, with the number of temporarily unemployed labourers and white-collar workers doubling to 141,000 in a matter of two years. This was followed by a downward trend which lasted until October this year, slowing down significantly during the summer. Two months ago the number of temporarily unemployed workers totalled 87,000 – 14,000 more than at the start of the financial crisis three and a half years ago. These ripples were also felt in the temporary employment sector. This sector is often considered a good forerunning indicator, as businesses often choose the temp route before opting for permanent job contracts when they experience a slight upturn of demand. The opposite rings true when demand drops. Despite a strong upward trend halfway through 2009, the high level of temporary contracts experienced in 2008 has not yet been equalled. On the contrary, since May this year it started to decline again, setting the trend for the slackening growth which was only really felt after the summer. To add insult to injury, the number of businesses that are liquidated each month is still 20% higher than before the crisis. Up until now, only the number of vacancies the Flemish Employment and Vocational Training Agency, VDAB, received, was the only indicator that showed a complete recovery. In May this year it reached the pre-crisis level. Unemployment, which usually reacts with a delay to an economic slowdown, peaked in August last year, when the number of unemployed job seekers was 42,800 up from 2008. Since then it is once again down by a third, but unemployment is still up by 27,000 when compared to the pre-crisis period.