This is one of the burning issues for Prime Minister François Bayrou next year. Between sluggish growth and declining investments, bad signals are accumulating on the labor market. In its economic report unveiled this Tuesday, December 17, INSEE expects unemployment to increase, from 7.4% of the active population to 7.6%, between the end of 2024 and June 2025.
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This is, of course, a relatively limited increase. On a more distant perspective, on the other hand, unemployment as defined by the International Labor Office (ILO) has been increasing slowly, but surely since January 2023. HAS At the time, it had reached a low point at 7.1%. In its latest projections, the Banque de France is counting on unemployment at 7.8% at the end of 2024. Promising “full employment” when he comes to power in 2017, Emmanuel Macron risks having to give up to his promise to reduce unemployment through a supply-side policy.
Uncertainty over recruitment projects
Cooled by a gloomy economy and strong political uncertainty, companies have eased off on job creation in 2024. Most business surveys conducted among managers report a wait-and-see attitude among managers. Worried about political stability and the government’s ability to prepare a budget and have it adopted in 2025, many are wondering about the future economic policy of the executive currently being formed.
Another factor explaining this gloomy climate: economic growth stalled with 0% in the fourth quarter of 2024, then 0.2% per quarter until mid-2025, forecasts INSEE. Planned cuts in apprenticeship support and an expected tightening of fiscal policy are also expected to weigh on companies’ motivations to hire. Finally, pension reform is expected to increase the working population by around 100,000 people in 2025. Given the sluggish growth, “ this rate would be insufficient to absorb the increase in the active population », underlines Dorian Roucher, head of the economic department.
On the employment front, the picture drawn up by INSEE is particularly gloomy. Growth in salaried employment would be zero between the last quarter of 2024 and the end of the first half of 2025.
“Employment has already slowed down significantly: in the private sector, coming out of the health crisis, labor needs and recruitment difficulties were very high and have since normalized. The French economy created 797,000 private salaried jobs in 2022, 312,000 in 2023, 108,000 in 2023, around 50,000 in 2024 and would begin to destroy private salaried jobs in the first half of 2025. noted at The Tribune Dorian Roucher.
Construction and industry in the red
By sector, construction is plunging, with net job losses over this entire period. On the front line in the face of tougher financial conditions, construction has paid a heavy price since the outbreak of war in Ukraine. Regarding the commercial tertiary sector, INSEE also expects zero growth in salaried employment between the fourth quarter of 2024 and the end of the second quarter of 2025. As for industry, it should continue to destroy jobs between January and next June. It is in fact the realization of all the social plans announced in Made in France since the beginning of autumn.
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Finally, with regard to agriculture, the creation of salaried jobs should oscillate between 2,000 at the end of 2025 and zero until next June. The only bright spot on the board? Creations of non-salaried jobs which largely correspond to the registrations of micro-enterprises. These creations vary between 20,000 and 15,000 per quarter over the period studied.
Productivity still at half mast
With a greater match between the pace of activity and that of employment, productivity per capita, that is to say the wealth created per job, has returned to its pre-health crisis level. On the other hand, this productivity has still not regained the losses accumulated since the start of the pandemic in 2020. “Productivity has only partially recovered since the pandemic,” says Dorian Roucher. By sector, productivity in the tertiary sector has exceeded its pre-pandemic level since the start of 2022. On the other hand, construction and industry are still struggling.
How can we explain such a dropout? Several works by economists have shown that the surge in energy prices since the outbreak of the war in Ukraine had caused damage to French productivity. The slowdown in prices should be favorable to an improvement in the wealth produced by employment in industry or construction. Other factors cited also include labor retention and learning supports. But given the upcoming budget cuts, aid for hiring apprentices is expected to decline in the coming months.
