assistant to the head of the studies department at INSEE Grand Est
The INSEE du Grand Est economic report for the 3 th quarter of 2020, in addition to precisely measuring the effects of the health crisis on the economy of the region most affected by the epidemic, also makes it possible to measure how employment and economic activity pick up once the rules of containment soften.
So at 3 th quarter, employment increased by 1.3%, without however wiping out the overall drop in jobs due to the crisis (- 1.4%), higher than the national average (- 1.2%). Since the end of 2019, the region has lost 126,700 jobs in all sectors of activity, with the exception of construction, where employment is increasing (+ 0.8%).
With a drop of 12% since the end of 2019, it is temporary employment that is paying the heaviest price to the crisis, despite the continued recovery that began in the second quarter. Almost 30% of the jobs lost during the crisis, 7,700 jobs, were in the interim.
At 3 th quarter, industrial employment continued to decline (-0.3%), although less rapidly than in the second quarter (-1%). The automotive industry is particularly affected, with a loss of 2.6% of its jobs over the first 3 quarters of 2020.
On the unemployment side, after a sharp increase during the first two quarters of 2020, the number of category A job seekers is decreasing in the Grand Est, especially among those under 25 who were most affected by the first confinement, and remain the most affected population.
The rise in unemployment since the start of the crisis now reflects job losses, standing at 8.7% of the working population (+ 0.6% over one year), 0.9% above the level before the crisis.
All the departments of the Grand Est region are affected by this rise in unemployment: + 1.5% in Haute-Marne, + 2.3% in Aube and Ardennes, departments in which unemployment rates are the highest ( 11% and 10.7%).
Economic activity, which had fallen sharply in the Grand Est during the first confinement (-30% compared to its level at the end of 2019), has gradually restarted to return almost to its level of autumn 2019 (-3% only). The second confinement from October 30, caused activity to fall again, but to a much lesser extent than during the first confinement (- 11%), some activities which had been entirely interrupted in the spring, having continued to function partially . This is the case in the construction industry or for businesses that remain open to the public.
Samuel Balmand is deputy to the head of the studies department at INSEE Grand Est. Interview.
– Reading the indicators for the third quarter, it seems that the Grand Est region is more likely to be in a period of economic recovery. Is this a trompe l’oeil impression or is it also your analysis?
Samuel Balmand. At 3 th quarter 2020 compared to the second, clearly, yes, we have an impression of recovery. The whole question is about the latest figures for the end of the year. There has been a re-containment, and therefore a decline in activity. So it’s hard to say that we are in an economic recovery. If we look at what is happening, whether in the Grand Est or at the national level, indeed in the 3rd quarter we saw that we had an economic slowdown which was less than in the first quarter, but in November At the beginning of December, we have a resumption of this decline.
– What surprised you about the economic indicators at the end of 2020?
Samuel Balmand There are a lot of things that are surprising. The creation of large companies, for example, is a bit counter-intuitive in the current crisis. We do not have a firm explanation to say why we have a strong increase in business creation, but we have hypotheses because we know the drivers of business creation. One of them is that business creators start a business to fill their own jobs. So in a context where looking for a salaried job has become very difficult, it could have affected creations. But we have not yet been able to test this hypothesis because we do not have enough information on auto-entrepreneurs and micro-enterprises. Then there could have been the creation of opportunities in certain sectors favored by the crisis.
There are also explanations which are more structural, since if we look at the evolution curve of business creations, setting aside the 2 th quarter, we have been on an upward trend since 2015.
– Which economic sectors are the most affected and which are the most resistant to the crisis?
Samuel Balmand If we look at what happened in November with the second confinement, we have on the one hand sectors which were either already little affected during the first confinement, or have learned lessons from the first confinement and which do relatively better. This is the case for agriculture, non-market services, and shops for example. And then next to that, we have sectors that were very affected during the first containment and which still are. This is the case for the hotel and catering industry or services to individuals. Regarding transport, heavy goods vehicles continue to perform well, but on the other hand, we have a decrease in private vehicles, and the car manufacturing sector is quite affected.
– Regarding employment, what is the current trend?
Samuel Balmand It is difficult to answer because we are still in the midst of the crisis, but what we are seeing is a decrease in employment in all major sectors of activity, with an exception for construction. And it’s a little early to say that the return to employment that we are seeing at 3 th quarter will be sustainable.
We also have a very marked decrease in temporary employment. In times of crisis, temporary workers are the first to leave.
– Still concerning employment, do we have elements of comparison with other periods of crisis?
Samuel Balmand We lack perspective to compare with other periods such as the 2008 crisis, which was a financial crisis that was transmitted to the rest of the economy. What we can say is that in 2008, the changes in employment were less brutal, they took place over longer periods. After 2008, it was also observed that there were differences between the territories, in particular in the Grand Est, with cross-border employment which helped to cushion the crisis. But there, insofar as our neighbors are also affected, we do not really know how it will work. We have little information to know how the employment figures will translate into social matters, especially in terms of poverty.
– Among the indicators that may also seem surprising, there is the increase in GDP in the border countries of the Grand Est in the 3 th trimester. How do you explain it?
Samuel Balmand The situation is close to what is happening in France, with an increase of + 18% of the GDP. We have big progress in all the countries in the 3 th quarter, but with GDP that remains below their pre-crisis level. So there is a rebound which is clear, but we are still at -4% over one year in France. The amplitude of the rise at 3 th quarter is the magnitude of the decline before.