Less growth in activity but still more jobs created: the number of salaried jobs in the private sector continued to increase in the second quarter of 2022, despite the war in Ukraine and the surge in the cost of energy. According to INSEE’s provisional estimate published on Friday, the private sector recorded 102,500 net job creations between the end of March and the end of June 2022. This increase of 0.5% is higher than that of the first quarter of 2022 (+0, 3%, or 69,500 more jobs).
A “surprise” increase for economists
The rise appears to be a “surprise” for economists, given the delicate economic context. After the small increase in the first quarter of 2022, “we rather expected a slight slowdown”, told AFP Sylvain Larrieu, head of the Synthesis and conjunctures of the labor market division of INSEE.
“How do we create so many jobs with so little growth?” asks Mathieu Plane, economist at the French Observatory of Economic Conditions (OFCE). He sees a “disconnection between the macro-economic environment and the dynamism of the labor market”. Private employment exceeded its pre-crisis level at the end of 2019, with 754,200 more jobs (+3.8%). But Mathieu Plane recalls that “we have experienced significant productivity losses” since the health crisis.
The massive return of tourists forward
The war in Ukraine, soaring energy costs, rising borrowing rates and the shortage of certain raw materials are among the causes of the slowdown in productivity. A factor explaining job creation in the private sector? Sylvain Larrieu cites the mass return of foreign tourists to France during school holidays. “Employment in the hotel and catering industry explains a good part of the increase”.
The commercial tertiary sector thus posted an increase of 0.8% in the number of additional jobs (+97,300 jobs), after an increase of 77,300 jobs in the first quarter (+0.6%). “This dynamism explains most of the total increase in private salaried employment,” notes INSEE.
Productivity ‘could catch up to previous levels’
Another reason put forward by Mathieu Plane, “companies retain jobs thanks to hiring aids, and seek to recover gains elsewhere”. But productivity “could catch up with previous levels, which poses a risk to the dynamics of employment for the future”, notes Sylvain Larrieu. Two options then emerge: “strong growth, accompanied by a return to productivity gains, or growth that remains sluggish and will be accompanied by job destruction”, according to Mathieu Plane.
In detail, temporary work, the compass of employment, continues its decline that began in the first quarter of 2022. While it experienced a sharp increase at the end of the spring 2020 confinement, it fell by 2.1% in the second quarter of 2022. (-17.400). “Temporary workers were widely used at the end of 2021 to replace absent employees”, notes Sylvain Larrieu. “On the other hand, in a difficult recruitment context, it is possible that employees request and obtain more permanent contracts”.
Interim at its pre-crisis level
But “interim remains above its pre-crisis level”, recalls INSEE. Excluding temporary work, all the other sectors stabilized. Industrial employment increased slightly with the creation of 3,100 jobs (+0.1%). An insufficient increase to catch up with the level before the health crisis. The construction sector is stable, with an identical level of private salaried employment at the start of 2022, and much higher than that reached at the end of 2019 (+6.2%, or 91,600 more jobs).
Finally, private salaried employment in the non-market tertiary sector increased more sharply, by 0.7% (+19,500 jobs), confirming here too the increase observed during the first quarter (by +7,600 jobs, or 0.3%). According to Sylvain Larrieu, work-study contracts “continue to push” the good employment figures. For work-study, employment has reached levels “much higher than its pre-crisis level”, he indicates.