Real wage growth is forecast to recover this year, increasing wage pressure towards normal historical levels.
Wage growth in high-skill sectors has accelerated, widening the country’s wage gap between high- and lower-skill industries.
Falling participation rates contributed to increased labour market pressure this year. The biggest decline is expected to be in youth participation rates, which remain at record lows.
Managing Director, Hays Italy
Labour market conditions have improved in Italy and the number of people employed has almost recovered to the 2008 peak. However, the employment rate remains low at 58% relative to some other European countries. While the unemployment rate has fallen from its crisis peak of just under 13% to around 11%, it remains a major concern as 33% of young people are without a job and just under 20% of those in the South of Italy are also unemployed. Real wage growth is expected to recover this year, increasing wage pressure towards normal historical levels, while wage growth in high-skill sectors has accelerated. Falling participation rates contributed to an increase in labour market pressure and youth participation rates remain at record lows.
Carlos Soave, Managing Director, Hays Italy
Employment increased by just over 1% in 2017 to reach levels close to the pre-global recession highs.
This reflected job growth in services, notably the hotels and restaurants sector, and education and health. The rate of job growth was identical across the Centre, North and South of the country, which was unusual relative to recent historical trends.
GDP growth is forecast to be 1.3% in 2018. This is slightly below the rate in 2017. This should be sufficient to ensure employment growth continues at about the same rate as 2017. The unemployment rate is predicted to continue to fall slowly, but the forecast demand for labour seems insufficient to make a major impact on unemployment amongst the young or areas of the South.