Data projects 2018 global economic growth to increase by 3.1 percent.
By Larry Basinait
To explore international labor markets, companies must first consult global labor market data. PeopleScout, a global provider of RPO, MSP, and total workforce solutions, has partnered with HRO Today to produce quarterly reports that compile current international labor market figures, including measures like national Gross Domestic Product (GDP) and unemployment rates over time, from countries across the globe. This data reveals critical information about the state of the talent pool, working conditions, and recruitment needs of various countries and regions. It is an essential tool for predicting fruitful locations for expansion and recruitment, thereby allowing multinational companies to stay competitive in talent acquisition.
The global economy is experiencing a cyclical recovery, reflecting a rebound in investment, manufacturing activity, and trade. This improvement comes against the backdrop of favorable global financing conditions, generally accommodative policies, rising confidence, and firming commodity prices. Global GDP growth is estimated to have picked up from 2.4 percent in 2016 to 3.0 percent in 2017—above the June 2017 forecast of 2.7 percent. The upturn is broad, with growth increasing in more than half of the world’s economies. Global growth is projected to edge up to 3.1 percent in 2018, according to World Bank.
According to the Bureau of Economic Analysis, GDP grew at 2.5 percent in the United States in fourth quarter of 2017, down from 3.0 percent in the third quarter. The increase in real GDP reflected increases in consumer spending, business investment, exports, and housing investment, as well as federal, state, and local government spending. These contributions were partly offset by declines in inventories. Imports, which are a subtraction in the calculation of GDP, increased, according to BEA.
In December, the U.S. unemployment rate declined slightly to 4.1 percent from 4.2 percent in September. The unemployment rate has remained at or below 5.0 percent since January 2016, suggesting stability in the American job market and conditions are considered by many economists to be “fully employed.”
Canada’s economy grew by 3.0 percent in 2017 and is forecast to grow by 2.5 percent in 2018. The optimism is based on continued resilience of domestic demand, which is expected to be complemented by improving exports to the U.S. According to the Monthly Economic Monitor, a resilient housing market may have contributed to the positive view on Canada as well as increased consumer and commercial demand from the U.S. as a result of U.S. tax cuts.
Early estimates suggest that the economy of the Association of Southeast Asian Nations (ASEAN) recorded another quarter of robust growth at the end of 2017, although activity slowed from the nearly five-year high in the third quarter of 2017. Regional GDP expanded by 5.2 percent in the fourth quarter, marking the second-fastest growth rate since the first quarter of 2013. The ASEAN economy picked up notably in the second half of 2017 thanks to strong external demand, especially for technology goods, as well as healthy labor markets and accommodative monetary policies, reported Focus Economics.
China has by far the largest economy in the region, with a GDP of nearly $12 trillion which was the result of strong annual growth. This is nearly two and one-half times larger than the second biggest economy, Japan, with a GDP of $4.9 trillion. Unemployment in these two huge regional players remained essentially unchanged since the third quarter of the year, with China reporting 4.0 percent unemployment and Japan a remarkable 2.8 percent.
Europe, the Middle East and Africa (EMEA)
The Eurozone economy continued to show robust growth in the final quarter of 2017, capping off the best year of expansion in over a decade. Exports grew at a solid rate in November, and the unemployment rate fell to a multi-year low in October in the 19 countries that comprise the Eurozone. Analysts project that the GDP for the region expanded by a robust seasonally-adjusted 0.6 percent in the fourth quarter—in line with results from the third quarter. Analysts forecast strong 2.2 percent growth for the European economy in 2018, according to Focus Economics.
Unemployment in the EMEA region fell or remained unchanged for eight of the 10 largest economies. Low unemployment rates in many of the largest economies will mean further reductions in the rate will be very small, if any changes occur at all. The German economy is the largest in the EMEA region with a GDP of $3,652 billion.
Unemployment in Germany declined by 0.1 percent to 3.5 percent in the fourth quarter of 2017. France is the second largest economy in the EMEA region, but it maintains a relatively high unemployment rate of 9.7 percent, up 0.2 percent since the third quarter of 2017. This rate is consistent with the fourth quarter of 2016. Despite the moderate increase, the unemployment rate is actually lower than it’s been in the last six years, with GDP growth in 2017 expected to have expanded at the fastest rate since 2012. Analysts forecast 2.0 percent growth in 2018.
Higher oil prices will boost economic growth among oil-producing economies this year, which will have a positive impact on regional growth in the Middle East and North Africa region for 2018. The region is expected to expand by 2.9 percent in 2018, and grow 3.3 percent in 2019.
Early readings for the end of 2017 suggest that the Latin America economy ended 2017 on a healthier note, with regional GDP projected to have grown 2.3 percent annually in the fourth quarter. Focus Economics’ forecast for the region predicts GDP growth of 2.3 percent in 2018 and 2.7 percent in 2019, which is moderate for the region.
The building momentum is being chiefly driven by stronger activity in Brazil. Inflation fell to historic lows in the fourth quarter, allowing the central bank to aggressively ease monetary policy to boost growth. Moreover, the unemployment rate edged down in the quarter, though it remains high at 11.8 percent.
Mexico is the second largest economy in the region, but the country is navigating choppy economic waters with leading data for the fourth quarter indicating that the 1.8 percent growth only recovered somewhat from the third quarter’s near four-year low of 1.5 percent. However, even though the Mexican economy isn’t growing as robustly as other countries in the region, its unemployment rate is low at 3.1 percent, down from 3.6 percent in the prior quarter.