KOF Employment Indicator Promises a Good Spring Season for the Labour Market
The Swiss labour market is getting off to a strong start in 2018, according to the KOF Employment Indicator, which continues to be in the positive range. The last time employment prospects in the construction industry were this promising was five years ago.
In January 2018, the KOF Employment Indicator registered 2.8 points – only a slight change from the last quarter of 2017 (3.1 points, revised upward from 2.4). Not since 2014 – a year that saw strong growth in Swiss employment figures – has the Indicator registered such a high value. The quarterly KOF Business Tendency Surveys provide the basis for calculating the Indicator. A positive Indicator value means more survey respondents say they plan to hire people in the coming months than those who plan the opposite.
Jobs growth in construction
It promises to be a sunny spring for the construction industry: the Employment Indicator for the sector has brightened considerably over the past few months. It stayed negative for virtually the entire period between 2014 and 2017, but climbed about 3 points in January 2018. The positive Indicator value reflects the longstanding health of the construction business, which now seems to be translating into an increased willingness on the part of companies to announce that they are hiring. Employment prospects continue to be similarly positive in many service industries, such as wholesale trade. Manufacturing and banking – two sectors that made significant layoffs over the past few years – also show increased signs of job creation again. The surveys indicate that employment prospects are less bright in the hospitality and retail sectors.
Note:
After its most recent publication in November, the Employment Indicator was revised slightly to incorporate input series that have been adjusted for seasonal effects. This change required the weighting for some of the indicators to be mildly adjusted as well.
The KOF Employment Indicator
The quarterly KOF Business Tendency Surveys provide the basis for calculating the Indicator. As part of these surveys, the KOF asks private businesses in Switzerland to assess their current staffing levels and whether they intend to change them over the coming three months. A positive figure for the Indicator means that the number of businesses that envisage cutting jobs during the reference quarter is smaller than the number of businesses that intend to create jobs. It has been shown in the past that these assessments are a precursor of actual developments on the labour market.
Click here for more information about the Indicator and its methodology.