Jean-Louis Richard, Senior Financial Analyst
At the heart of the job market, Adecco is at the forefront of economic developments. Its quarterly results published in early November are rich in information: the temporary working group, which showed a growth rate of 6% at the beginning of the year, decelerated to only 1% by the end of 2018. There is undoubtedly a slowdown in the industry. Let’s mention the German carmakers: 30% of the activity in this country, they have reduced their production because new models are piling up on storage car parks. According to Adecco, delays in the new certification process for greenhouse gas emissions are the main cause.
Another factor is that when a job market becomes tense and talent is scarcer, employees lose interest in temporary work in favour of fixed jobs. Adecco posts a 20% jump in hiring in fixed jobs, an activity where margins are more comfortable. Unfortunately for the group, in this phase of the cycle, the interim remains its main source of income, about 70% of its revenues. This results in lower growth, especially in countries where unemployment is lowest. In North America, the qualified temporary agency segment recorded a 2% decline in activity in the third quarter. The decline is similar in the German market as a whole.
However, the main cause of the Adecco slowdown is found further south: after 25% growth recorded in Italy in 2017, the pace fell to 6% in the third quarter of 2018. In France, the corresponding figures are respectively 7% and 5%. These regions are not yet at the stage of the United States, nor of Germany, but, obviously, they have advanced in their cycle.