GLOBAL UNEMPLOYMENT REPORT Q3 2017

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1 TM GLOBAL UNEMPLOYMENT REPORT Q3 2017

2 GLOBAL UNEMPLOYMENT REPORT Q To explore international labor markets, companies must first consult global labor market data. PeopleScout, a global provider of RPO, MSP and Total Workforce Solutions, has partnered with HRO Today Magazine to produce quarterly reports that compile current international labor market figures, including measures like national Gross Domestic Product (GDP) and unemployment rates over time, from countries across the globe. This data reveals critical information about the state of the talent pool, working conditions and recruitment needs of various countries and regions. It is an essential tool for predicting fruitful locations for expansion and recruitment, thereby allowing multinational companies to stay competitive in talent acquisition. To truly understand unemployment rates, it is necessary to collect other types of information about the overall economic environment from which they derive. That is why, in addition to unemployment rates, this report analyzes measures that include GDP, economic forecasts and other factors that offer further insight into a given country s unique economic circumstances. This report also includes an assessment of English proficiency for those countries that do not primarily speak English. Analysis According to the World Bank s June 2017 Global Economic Prospects report, global economic growth in 2017 is projected to accelerate to 2.7 percent, up from 2.4 percent in Activity in advanced economies, driven by economic growth in the United States, has gained momentum in 2017, accelerating to 1.9 percent before moderating gradually in 2018 and In Europe and Japan, strengthening domestic demand and exports have led to improved 2017 growth forecasts. Growth in emerging markets and developing economies is projected to reach 4.1 percent in 2017 and 4.5 percent in (1) Countries with English as a Second Language Proficiency This edition of the Global Unemployment Report also provides statistics on countries with the greatest English proficiency when English is a second language. English is the world s most widely spoken language but is unusual in the fact that the vast majority of speakers are not native. Of the approximately 1.5 billion people who speak English, less than 400 million use it as a first language. That means more than 1 billion speak it as a secondary language. (2) The English Proficiency Index has published its latest research scoring countries around the world where English is a second language. English correlates with key economic and social indicators. Countries with higher levels of English proficiency tend to have more service exports, better Internet access and more investment in research and development than countries with lower English proficiency. (3) Most national economies are becoming increasingly dependent on international trade, which represents more than 30 percent of world GDP up from 20 percent just two decades ago. English is the common language required for these global transactions. (4) 1. World Bank s June 2017 Global Economic Prospects 2. Which Countries Are Best At English as a Second Language? World Economic Forum, November 16, Education First English Proficiency Index, 2017, page Ibid. Page 10 2

3 NORTH AMERICA According to the Bureau of Economic Analysis, third quarter 2017 GDP grew at 3.0 percent in the United States, similar to the second quarter. The increase in real GDP reflected increases in consumer spending, inventory investment, business investment and exports. The increase in consumer spending reflected increases in spending on both goods and services. A notable offset to these increases was a decrease in housing investment. Imports, which are a subtraction from GDP, decreased. (5) In September, the U.S. unemployment rate declined slightly to 4.2 percent from 4.4 percent in June. The unemployment rate has remained below 5.0 percent since January 2016, suggesting stability in the American job market and conditions considered by many economists to be fully employed. Despite a third-quarter slowdown, Canada s economy remains on track to grow about 3.0 percent in Consumption spending has been the major driver of growth this year benefiting from the convergence of favorable developments, including the best labor market in years and low interest rates, as well as the wealth effects associated with surging home prices in parts of the nation. (6) 5. BEA Press Release, October 27, Monthly Economic Monitor, National Bank of Canada, Financial Markets, November

4 ASIA-PACIFIC The Association of Southeast Asian Nations (ASEAN), which is comprised of 10 countries in Southeast Asia, regional GDP grew 5.3 percent annually in the third quarter, above the second quarter s 5.0 percent. The result marks the fastest growth rate since the first quarter of (7) Estimates on Indonesia, the fourth largest economy in the region, revealed slower-than-expected growth in the third quarter, with GDP growth for the quarter flat at 5.1 percent. The Chinese GDP expanded 6.8 percent in the third quarter, just a notch below the 6.9 percent increase reported in the first half of the year, and well positioned to achieve 2017 s 6.5 percent growth target. The Chinese GDP is reported at Intl $21,269 billion annually, more than twice the next largest economy in the region, India, which reported a GDP of Intl $8,721 billion annually. China s published unemployment percentage is 3.95 percent, basically unchanged since the prior quarter. Elsewhere in the region, GDP growth surged in Singapore and Vietnam. Strong demand for electronics in both economies along with a healthy agricultural sector in Vietnam positively impacted the country s economy. Japan, the third largest economy in Asia-Pacific, maintained a low unemployment rate of 2.8 percent, down from 3.1 from the second quarter and better than the level of 3.0 percent a year ago. The Japanese economy expanded for the seventh consecutive quarter in the third quarter, the longest period of growth in more than a decade. The GDP rose 1.4 percent in the third quarter over the second quarter. (8) 7. Economic Snapshot for ASEAN, FocusEconomics, November 15, 2017, economics.com/regions/asean 8. Japan: Exports shore up economic growth in Q3, FocusEconomics, November 15, 2017, 4

5 (Asia-Pacific Continued) Regional English Proficiency The average English proficiency of adults in Asia is the second highest in the world, only behind Europe. A closer look at the data, however, reveals that Asia has wider proficiency disparities than any other region. Although Asia is becoming more economically integrated as a region, the flow of people between countries remains low. Asia has about half the world s population but only 17 percent of its immigrants. Higher English proficiency across the region, as well as much-needed immigration reform, would facilitate the migration necessary to keep Asia s largest economies healthy. The top five countries in the region for English proficiency are Singapore, Malaysia, Philippines, India and Hong Kong. China remains in the low proficiency band and shows only slight improvement from the previous year. EUROPE, THE MIDDLE EAST AND AFRICA Unemployment in the EMEA region fell for nine of the 10 largest economies, with only Saudi Arabia reporting an uptick. The German economy is the largest in the EMEA region with a GDP of Intl $3,980 billion. Unemployment in Germany declined 0.3 percent to 3.6 percent in the third quarter of The United Kingdom is the third largest economy in EMEA. Unemployment in the third quarter fell to 4.3 percent, down from 4.6 percent in the second quarter. According to the Office for National Statistics, the U.K. economy grew by just 0.4 percent in the third quarter of 2017, following a 0.3 percent expansion in the second quarter of Italy, 5

6 (Europe, The Middle East and Africa Continued) France and Germany are expected to grow faster than the U.K. next year, as Brexit uncertainties weigh on consumer confidence and deter business investment. (9) France is the fourth largest economy in the EMEA region, but it maintains a high unemployment rate of 9.5 percent, slightly better than the 9.6 percent in the second quarter of However, the rate declined by 0.5 percent since last year, which is an encouraging sign. The French economy advanced 0.5 percent during the third quarter of 2017, following an upwardly revised 0.6 percent expansion in the second quarter. It was the fifth straight quarter of growth. (10) United Arab Emirates has the second largest economy on the continent of Africa, behind only South Africa. GDP and unemployment data are not updated with the same frequency as other nations, but analysts believe the nation s third-quarter GDP growth is consistent with estimates for 2018, which are around 3.0 percent. The expansion of the non-oil sector appeared to drive economic growth. (11) Regional English Proficiency Europe s average English proficiency score is slightly higher than that of Asia, the second highest scoring region. The gap widens if we exclude the lower proficiency countries on the edges of Europe from the regional average. Eight of the top 10 countries in this year s index are in Europe. High levels of English proficiency go hand-in-hand with Europe s multiculturalism, economic integration, tourism and mobility. However, in the current political climate, some Europeans are looking more inwardly than globally. Africa s English proficiency remains difficult to gauge based on the data available. The poorest performing region is the 9. UK interest rate rise likely as GDP beats forecast to grow by 0.4%, The Guardian, October 25, Rida Husna, France GDP Growth Rate, Trading Economics, accessed 11/16/ United Arab Emirates Economic Outlook, Focus Economics, 10/31/

7 (Europe, The Middle East and Africa Continued) Middle East and North Africa where all but two nations Morocco and the United Arab Emirates are rated very low. The top five countries in the EMEA region for English proficiency are the Netherlands, Sweden, Denmark, Norway and Finland. Despite its economic might, Germany is only ranked seventh in English proficiency in the region. LATIN AMERICA According to FocusEconomics, a leading provider of economic analysis and forecasts for 127 countries, preliminary data suggests that growth momentum is largely holding up across the Latin American economy, and the recovery remains firmly underway. The regional GDP expanded 1.6 percent in the third quarter of 2017, above the second quarter s 1.1 percent increase. If confirmed, the result would mark the fastest growth rate since the first quarter of Brazil and Argentina, the largest and third largest economies in the region, are seen as having gained steam as their economies emerge from deep recessions. In Brazil, low inflation and improving labor market dynamics are supporting household spending, while painful economic reforms are finally beginning to show positive results in Argentina. Brazil s unemployment rate remains high at 12.4 percent, though that number is down nearly one percent from the second quarter. Argentina s unemployment rate is 8.7 percent, also down substantially since the prior quarter. However, Mexico, the second largest economy in the region, defied the regional trend, despite a low unemployment rate of 3.6 percent. Preliminary estimates 7

8 (Latin America Continued) reveal that growth lost some steam in the third quarter. High inflation and disruptions from two earthquakes in September weighed on the result; however, robust external demand and healthy tourism revenues propped up growth. (12) Regional English Proficiency English proficiency in Latin America is catching up to that in Asia. The average English proficiency score in Latin America is now just two points behind that of Asia, but English skills are distributed quite differently within the two regions. Countries in Latin America have the narrowest proficiency score range of any region, with just over 10 points separating Argentina, the region s highest proficiency country, from El Salvador, the lowest. In Latin America, adult literacy is above 90 percent in almost every country. Public spending on education has risen and is currently in line with Europe as a percentage of GDP. Despite these successes, and extensive economic and social ties to the United States and Canada, English proficiency levels in Latin America are still slightly below the global average. Mexico, which is adjacent to the U.S. and the country s largest trade partner and source of tourism, has a low English proficiency. The top five countries in the Latin America region for English proficiency are Argentina, Dominican Republic, Costa Rica, Brazil and Uruguay. Mexico ranks sixth in the region for English proficiency. 12. Economic Snapshot for Latin America, FocusEconomics, November 8,

9 WORLDWIDE UNEMPLOYMENT SNAPSHOT Q WORLDWIDE UNEMPLOYMENT SNAPSHOT: 3Q 2017 NORWAY CANADA IRELAND UNITED DENMARK KINGDOM NETHERLANDS BELGIUM FRANCE PORTUGAL UNITED STATES OF AMERICA SPAIN FINLAND RUSSIA SWEDEN GERMANY POLAND KAZAKHSTAN AUSTRIA SWITZERLAND ITALY JAPAN CHINA ISRAEL EGYPT MEXICO SOUTH KOREA TURKEY GREECE KUWAIT QATAR SAUDI ARABIA INDIA UNITED ARAB EMIRATES TAIWAN BANGLADESH HONG KONG VIETNAM THAILAND PHILIPPINES MALAYSIA COLOMBIA SINGAPORE INDONESIA PERU BRAZIL AUSTRALIA CHILE SOUTH AFRICA ARGENTINA 0 3.9% % % Note: Only those countries included in the Worldwide Unemployment Snapshot in this report are shown % 15.0 % and above (not included) WORLDWIDE UNEMPLOYMENT SNAPSHOT 3Q 2017 TM 9

10 WORLDWIDE UNEMPLOYMENT SNAPSHOT Q *Data from the International Monetary Fund (2015) 10

11 COUNTRIES WITH ENGLISH AS A SECOND LANGUAGE PROFICIENCY COUNTRIES BEST AT ENGLISH AS A SECOND LANGUAGE The English Proficiency Index 2017* Netherlands Sweden Denmark Norway Singapore Finland Luxembourg South Africa * Note: Based on 2017 data from EF Education First 11

12 Additional Implications when Using Report Findings HR professionals should exhibit caution when interpreting the results in this document. What constitutes unemployment isn t cut and dry; even countries with long-standing practices in reporting unemployment periodically change criteria. Some countries adjust unemployment estimates because of seasonality, and some do not. The definition of full-time employment and who should count as a member of the labor force varies by country. Therefore, comparing unemployment rates between advanced countries like the United States and middle-income countries like China is very difficult. In China, the picture is complicated further by nearly 300 million rural migrant workers who are almost entirely ignored by unemployment statistics. When interpreting unemployment rates, trends matter most, though one cannot ignore the implications of widely different rates between countries. For example, the unemployment rate in Greece is 21.0 percent, while in Germany it is below 4.0 percent. The conclusion is that while unemployment rates between countries may not be calculated consistently, there are proportionately far more Greeks unemployed than Germans. HRO Today Magazine and newsletters are read by more than 140,000 HR executives and leaders worldwide and covers the latest industry trends in HR outsourcing, services, shared services and operations. HRO Today Magazine is the publication of choice for the most senior executives facing the strategic decisions about operational excellence. HRO Today and offer the best content choices for the HR leaders seeking online information in the form of newsletters, webinar series and online video content. HRO Today Magazine is a product of SharedXpertise. TM PeopleScout, a TrueBlue company, is the world s largest RPO provider managing talent solutions that span the global economy, with end-to-end MSP capabilities supporting total workforce needs. PeopleScout boasts 98 percent client retention managing the most complex programs in the industry. The company s thousands of forward-looking talent professionals provide clients with the edge in the people business by consistently delivering now while anticipating what s next. Affinix, PeopleScout s proprietary talent acquisition platform, empowers faster engagement with the best talent through an AI-driven, consumer-like candidate experience with one point ATS and VMS integration and single sign-on. Leveraging the power of data gleaned from engaging millions of candidates and contingent associates every year, PeopleScout enhances talent intelligence for clients across more than 70 countries with headquarters in Chicago and Sydney and global delivery centers in Charlotte, Toronto, Montreal, Krakow, Gurgaon and Bangalore. For more information please visit 12

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