Greece Macro Flash: Labor Force Survey Q2:2017

Greek labor market recovery picks up, including an improvement in qualitative aspects of job creation

Employment growth picked up in Q2:2017, reaching 2.3% y-o-y, up from 1.4% y-o-y in Q1:2017 and 0.5% y-o-y in Q4:2016 (s.a. data), according to LFS data released by EL.STAT., and remains in positive territory for a 12th consecutive quarter.

The creation of 48K jobs (net) in Q2:2017 (seasonally-adjusted quarterly basis) and of 90K jobs, in total, in H1:2017 corresponds to the best performance since the 1st semester of 2008.

Employment creation in Q2:2017 has been the most broad-based since the eruption of the crisis. For the first time since 2008, employment increased in all subsectors of the private economy, except construction, indicating that the business rebalancing is at an advanced stage.

Dependent employment has gained new ground during this period, as the net increase in wage earners positions accounted for almost  85% of new jobs in Q2:2017 or 41K jobs and almost 100% of hirings in the accommodation and food sector.

According to the LFS definition, full-time jobs accounted for 75% of new job creation in Q2:2017 compared with 48% in Q1:2017 and 65%, on average, in FY:2016 suggesting that businesses are becoming more confident about demand prospects, albeit a part of these new full-time employees work on temporary contracts (an estimated 7%).

The solid improvement in high frequency indicators of labor market conditions presages a healthy expansion of about 2.4% y-o-y in employment in Q3:2017, which corresponds to a net addition of 16K jobs on a seasonally-adjusted basis in this quarter. Overall, the average increase in employment in FY:2017 is estimated to reach 2.2% y-o-y or +85K positions (compared with +2.0% y-o-y and +77K jobs in 2016), with the unemployment rate declining to 21.4% in Q4:2017 from 23.4% in Q4:2016.