Temp agencies monitor: second quarter of 2007

12/10/2007 15:00

Turnover of temp agencies grew by well over 20 percent in the second quarter of 2007 compared with the corresponding quarter in 2006. This means that the growth rate in turnover has now exceeded 20 percent for more than 18 months in a row. The sentiment among these companies has improved further and is extremely positive. The expectations for the third quarter of 2007 are again very optimistic.

Turnover grown a little less

In the second quarter of 2007, turnover of temp agencies increased by well over 20 percent compared to the same quarter in 2006. This makes it the sixth consecutive quarter with a growth rate of over 20 percent. The turnover increase of temp agencies has been more than twice as high as that of business services as a whole for over two years. When adjusted for seasonal changes, turnover increased by almost 4 percent on the previous quarter, which is the lowest growth rate since the third quarter of 2005. The exceptional growth in turnover in this economically sensitive branch therefore appears to be levelling off gradually. In conclusion, the turnover of temp agencies in the first half of 2007 increased by almost 22 percent on the first half of 2006.

Year-on-year turnover changes

Year-on-year turnover changes

Less increase in temp hours

In the second quarter of 2007 the number of temp hours worked increased by 15 percent compared with the same quarter of 2006. The number of hours worked by people who have a contract with a temp agency (stage A) has been falling slightly since the first quarter of 2006, and this tendency continued in the second quarter of 2007. Notwithstanding this, the increase in stage A temp hours amounts to 14 percent.

Temp hours in stages B and C, where people are assigned to work for other companies, increased by 18 percent on the same quarter of 2006. This means the growth rate has fallen slightly in comparison with the two preceding quarters, when the increase was 21 percent. All in all, the number of hours assigned to work for other companies has increased considerably over the past two years, and shows a far more positive trend than stage A temp hours. In the first half of 2007 the number of temp hours in both increased by a total of almost 16 percent on the first half of 2006.

Seasonally adjusted index of temp hours

 Seasonally adjusted index of temp hours

Rise in orders received and extremely positive opinions

Results from the Business Sentiment Survey of July 2007 show that the sentiment among temp agencies remains very positive. The entrepreneurs reported that they received more orders in the second quarter of 2007 than in the first. Their opinions on orders received had been positive in the preceding quarters but toned down slightly in the second quarter of 2007. According to temp agencies, selling prices have further increased and the work force has expanded in the second quarter. Opinions of the vast majority of temp agencies on the current economic climate are ‘good’. This indicator rose from -60 at the start of 2004 to almost +70 in the second and third quarters of 2007. The sentiment among entrepreneurs of temp agencies has been mainly positive since late 2005.

Opinions on orders received and economic climate

 Opinions on orders received and economic climate

Optimistic expectations among temp agencies

The sentiment among temp agencies in the third quarter of 2007 is very positive. Nearly 80 percent of the entrepreneurs in this branch foresee a further increase in orders received, while only 6 percent expect a decline in orders. They also expect prices to increase further. Therefore, turnover is expected to increase further as well. A net 45 percent of temp agencies expect to increase staff numbers in the third quarter. Expectations in this branch are still more optimistic than in other branches in business services.

Expectations for the third quarter of 2007

Expectations for the third quarter of 2007