France: What if the structural unemployment rate was 9%? – Natixis

Prior to the 2008 crisis, the structural unemployment rate in France was around 7.5% and with an unemployment rate in mainland France of 9.4% at present, there are numerous signs of very severe pressure on the labour market, suggests Patrick Artus, Research Analyst at Natixis.

Key Quotes 

• “38% of French companies say they have recruitment difficulties, mainly linked to the unavailability of skilled labour, which is the same level as in 2007;
• The number of French companies saying they have supply problems now exceeds the number of companies saying they have demand problems. The supply problems concern insufficient labour and procurement problems, which must be seen in the context of very significant recruitment difficulties in road transport;
• Wages are starting to accelerate in France.”

“If the structural unemployment rate in France is actually 9%, growth will slow down very fast.”

“If the structural unemployment rate in France is around 9%, at the current pace of job creation France will very soon be at the structural unemployment rate, and growth will necessarily have to slow down since companies will no longer be able to hire.”