Why few companies in Europe are hiring workers from abroad despite shortages

Many European companies, especially small and medium-sized enterprises (SMEs), are facing labor and skill shortages, particularly in roles requiring vocational training qualifications. This shortage has become a significant challenge across various sectors, affecting businesses in numerous countries.

Despite efforts to recruit from abroad, such as within the EU or from non-EU countries, the proportion of companies hiring foreign workers remains relatively small. Challenges in recruiting from abroad include language barriers and administrative obstacles.

The European Commission has proposed measures to address these issues, including making it easier to recognize professional qualifications and creating an EU Talent Pool to match European companies with non-EU jobseekers. Additionally, there are efforts to review rules to facilitate the movement of third-country nationals within the EU.

BusinessEurope, a confederation of industry associations in Europe, sees economic migration as a solution to labor and skills shortages and supports initiatives to increase worker mobility within the EU and attract skilled workers from outside the EU.

Overall, while labor and skill shortages persist, there are ongoing efforts at both the EU and industry levels to address these challenges and improve worker mobility across Europe.

https://www.thelocal.dk/20231204/why-few-companies-in-europe-are-hiring-workers-from-abroad-despite-shortages 

Denmark Debt

The recent figures released by Denmark's central bank, Nationalbanken, reveal a positive trend in the country's finances. At the start of 2024, the national debt stands at 294 billion kroner, which is 28.6 billion kroner lower than the previous year. This places Denmark's debt at around 10.5 percent of its GDP, marking the lowest level since such records began.

According to Kristian Skriver, a senior economist with the Danish Chamber of Commerce, this achievement reflects the robustness of Denmark's public finances. Factors contributing to this include surpluses in public finances in recent years, driven by high employment, low unemployment, and strong consumer spending. Additionally, Denmark's political discipline in adhering to budget allocations prevents overspending.

The low national debt not only signals healthy finances but also allows for relatively low interest rates, enhancing economic stability. Denmark's ability to maintain low debt levels provides flexibility in borrowing during times of crisis, bolstering its economic resilience.

Comparatively, Denmark's national debt is notably lower than many other European countries, with only Estonia, Bulgaria, and Luxembourg having lower debt-to-GDP ratios. This underscores Denmark's strong position and fiscal responsibility within the European context.

Overall, Denmark's achievement of significantly reducing its national debt reflects a combination of economic factors and prudent fiscal management, positioning the country favorably in the global economic landscape.

https://www.thelocal.dk/20240123/denmarks-national-debt-at-lowest-level-for-25-years

Service Sector Leads Eurozone Recovery

    There has been some optimism among European businesses recently, with their expectations reaching a level not seen since early 2022. Private sector activity in the eurozone increased last month, with southern European economies leading the charge, but Germany and France lagged behind. There has been a positive shift in the economy following a prolonged period of stagnation caused by the war between Ukraine and Russia. The conflict pushed prices soaring and damaged consumer and business confidence. Despite these challenges, evidence of recovery is beginning to emerge: inflation is beginning to slow down, and households are starting to recover spending power.

    According to the latest Eurozone Composite PMI Output Index, which measures activity in the manufacturing and services sectors, the economy is showing signs of improvement. Since May of last year, the index rose above the growth threshold, suggesting that the economy may have expanded in the first quarter of the year following a period of stagnation in late 2023. In comparison, Germany and France have continued to contract, although at a slower pace than the Spanish and Italian economies.

    In the past nine months, the services sector experienced its most significant expansion, being one of the key drivers of such a recovery. The manufacturing sector, however, continues to face challenges because of ongoing contractions. Spain's tourism sector contributed to its noticeable economic performance matching U.S. growth last year.  Due to weak export demand, Germany, on the other hand, experienced difficulties regarding weak export demand, highlighting the difference between two of the major European economies. The article highlights that despite the challenges, there are encouraging signs for European countries. Consumer spending is strengthening and inflation is easing, increasing optimism about a more sustained recovery.

'Resilience' of Belgian Economy Supports Local Start-ups

     With Belgium's economy now being among the fastest growing in the eurozone, young businesses appear to be flourishing. Belgium now has 15 businesses in the FT 1000 list, when added to the Netherlands' 29, is highlights the role of Benelux counties in such sectors as fintech, smart logistics, and advanced manufacturing. Economists at Belgian bank KBC emphasize the country's economic strength as its real GDP growth in the final quarter of 2023 was 0.4 percent, which was double their forecast. Economists say this positive surprise shows the continued resilience of the Belgian economy. Belgium is one of very few European countries that has not recorded a single negative quarterly growth rate since the beginning of 2022. 

    The main driver in growth seen has been in the Dutch-speaking region of Flanders. Unlike other regions, Flanders has little legacy of heavy industry, such as coal mining and steel making, and instead tends to host companies in high-margin industries. As Belgium is a federal state, Flanders has its own government which controls over half of state spending. Flander's economy is supported by a dedicated resilience plan, which aims to keep it competitive, and includes financial and administrative help for start-ups. The fastest-growing sectors include life science, automotive, media, and entertainment. Anthony de Bruyn, marketing director, says Belgium is a great place to start businesses, but adds that the biggest issues for start-up businesses are finding staff and investors to scale up.

Switzerland's Economic Outlook

 The Swiss economy weathered the storms of the global pandemic admirably. Stringent health measures, coupled with a robust healthcare system and effective government support, helped mitigate the worst economic impacts. Despite facing adversity, Switzerland displayed remarkable resilience, with GDP growth bouncing back steadily in the post-pandemic era. Switzerland has and will continue to face various geopolitical tensions, trade uncertainties, and supply chain disruptions pose risks to its export driven economy. Aging population also is an area of concern. Switzerland's commitment to innovation has continued post-pandemic. The country sets entrepreneurship and technological advancement first. One differentiator is their desire to innovate in a sustainable manner. They have maintained an extremely adaptable while coupling with an innovative system.

Immigration May be Key Factor in Economic Growth in the U.S

According to economist, it is believed that the recent surge in immigration following the 2021 pandemic is a driving reason behind the economic boost in the U.S. job market. All without causing significant inflation. The increase of immigration has caused employers to fill job positions at levels of pay that have not increased the overall price levels. In turn, the growth of the labor force has helped companies meet stronger consumer demand. Economist also believe that immigrants who are authorized to work within the U.S. spend a large portion of their pay which will further increase consumer demand. 

Source: 

https://www.nbcnews.com/business/economy/immigrants-are-helping-us-job-market-grow-without-affecting-inflation-rcna146570

Japan’s Real Wages Decline

Because inflation has surpassed wage growth, Japanese workers have seen a decline in their real wages for more than a year. Household spending has decreased as a result of this. Still, there are indications of improvement. The largest pay increase in more than thirty years was achieved through recent union negotiations, surpassing the anticipated rate of inflation. Furthermore, businesses are under pressure to increase wages due to Japan's competitive labor market.

Regarding these developments, the Bank of Japan  is optimistic. They think that as wages rise, there may be a positive feedback loop that increases inflation and consumer demand, which would free them up to raise interest rates and ultimately normalize monetary policy. In their next inflation projections, the BOJ will be looking for validation of these trends.

Positive eclipse affects for Ohio towns

The Dayton Daily News reports that they expect to see a business surge for the solar eclipse on April 8th. As all Ohioans know, the state will be in totality for portions of the eclipse which has influenced travel to many of the areas affected. Local economies can expect full hotels and restaurants with bustling commerce for eclipse related items and essential travel products, like gasoline. Based upon numbers from the 2017 eclipse affect on Wyoming, Ohio can expect up to half a million visitors across the state.  Additionally, Wyoming saw around $60 million in spending for goods and services related to the eclipse.  

Many business in the area have prepared special events. Additionally bars and restaurants are promoting eclipse brews at bars to capitalize on the eclipse hype. Local business are also selling merchandise like t-shirts. But, the eclipse will not only affect downtown areas, rural areas have had to prepare for an influx of visitors. For many rural areas, they needed to prepare their infrastructure.

Shopping and commerce areas in Ohio will likely largely benefit from the event. Now, it is just for us to wait and see the final impact. Some officials say to watch for quarterly lodging tax checks to see a more tangible economic impact.

https://www.daytondailynews.com/local/area-businesses-hope-to-cash-in-on-monday-eclipse/CMYIRMUOSVHHPLYNMBMV43JOF4/#:~:text=Zeiler%20estimates%20Ohio%20will%20see,and%20lodging%20throughout%20the%20weekend.

Unknown When Interest Rates Will Drop

Interest rates have been expected to drop for some time, however, the federal reserve has yet to do so. This is due to the mixed economic signals they have been receiving. While job loss and unemployment have been on the rise, there has also been increased hiring and wages. This data makes the fed's decision making more difficult. With the fed still keeping interest rates high, people have began to question when they will finally drop. It all depends on future inflation data, as many fed officials have already advocated for rate cuts. Many experts have predicted a drop in interest rates around this coming June, but with mixed economic data, there is difficulty in predicting what will happen next. 

https://www.marketplace.org/2024/04/04/when-will-rates-go-down-the-answer-rests-on-conflicting-economic-data/

How the eclipse has impacted short-term rentals like Airbnb

The upcoming solar eclipse on April 8th has spurred a surge in interest and travel plans across the United States. With the path of totality stretching across 14 states, millions are anticipated to witness the event, far exceeding the number of residents within the path. This has led to a significant increase in short-term rental bookings, particularly in areas along the eclipse's path, with an 88% rise in bookings observed. 

Data from Yougov.com indicates that over half of the U.S. population has made plans to view the eclipse. Notably, demand for short-term rentals within the path of totality has skyrocketed, with occupancy rates peaking, as depicted in a trend map from Airdna.co. While rental bookings in states outside the path of totality have seen only a modest increase of about 4%, cities within the path have experienced a surge of over 200%. 

Consequently, hosts in these areas have capitalized on the heightened demand by raising prices, with Missouri and New Hampshire witnessing substantial year-over-year increases of 338% and 514% respectively. This trend underscores the willingness of people to travel extensively for extraordinary natural phenomena.

Euro Zone Inflation Slows to 2.4% in March

 The euro zone made up of 20 nations has seen its inflation drop down to 2.4% in the most recent reading. This increases the likelihood of seeing cuts to the interest rate in the upcoming summer. Not only was inflation reported at 0.2% lower than forecasts, core inflation also 2.9% which is below the 3.1% estimate. However, not all is perfect as wage growth has continued to show up in the constant 4% inflation in services. 

The biggest economy within the euro zone is Germany which saw its lowest rate of inflation in three years this past month at 2.2%. Experts believe the euro zone inflation rate will fall below 2% at some point this summer, leading to general belief that a first rate cut will be seen in June. Some experts still believe there will be five rate cuts within 2024 even though there are some points of concern that remain within the European economy such as the continued inflation in services and the fall of food prices. 

Source - https://www.cnbc.com/2024/04/03/euro-zone-inflation-march-2024.html

Economic Impact of Solar Eclipse.

 The predicted possible economic impact of the solar eclipse on Monday is as much as a 6 Billion dollar boost to the economy. The path of the eclipse stretches over 115 miles in the U.S. and many people are expected to travel to see it. These people will be spending money on food, gas, accommodations, etc. This will provide a significant economic boost to towns and cities in the path. The hotel occupancy rate for the night before the eclipse is 92%. Paducah, Kentucky is actually in the path of totality for the second time in the past decade, which is providing them with yet another major boost and providing local business owners to opportunity to learn from their experiences last time.

https://www.investopedia.com/economic-impact-2024-solar-eclipse-8627476