European companies continue to shed jobs

The latest European labour market figures show that unemployment increased by 1.1% in February as the financial crisis continues to hit companies, particularly in the manufacturing sector.

The EU’s monitoring of the employment situation and social outlook for April shows that companies are continuing to announce substantial job reductions across several sectors, while business and consumer confidence, job vacancies and firms’ employment expectations are generally continuing to fall. 

As highlighted in previous such ‘Labour Marketing Monitoring’ reports, men are worst affected by the downturn, as many of the sectors hit hardest are predominantly male-oriented, such as the construction, automotive and transport industries. 

At the same time, there has been a continued strong rise in unemployment among young people, particularly affecting young men. 

However, the report said that while there may be tentative signs that the level of economic decline is beginning to stabilise, unemployment is still expected to rise further in the months ahead.

“While firms’ employment expectations for the months ahead generally remain unfavourable, there are indications that the broad downward trend observed since late 2007, and which accelerated between October 2008 and January 2009, may be levelling out,” according to the report, published by the European Commission yesterday (April 7). 

Nevertheless, overall business and consumer confidence remain low, and recent forecasts by the ECB, IMF, OECD and Business Europe paint a gloomy economic picture. 

Overall unemployment in the EU rose by around half a million in February, with unemployment rates rising in all but two member states. 

The figures confirm that joblessness is now also edging up in Germany and Poland, where labour markets had previously shown protracted resistance to the downturn. 

The report also highlights the impact of the liquidity crisis on small businesses, as credit for SMEs shows little sign of loosening and consumers have less scope for spending. 

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