French Job Growth Returns to Pre-Crisis Levels

France’s economy added more than 50,000 private sector jobs in the last three months of 2017 as employment growth returned to levels not seen since before the global financial crisis, official data showed on Tuesday.

Boosted by low interest rates, a global economic rebound and high business confidence, France has only in the last year merged from a decade of low growth and weak job creation that has left nearly 3.5 million people out of work, Reuters reported.

Some 53,300 net new jobs were created in the fourth quarter, up 0.3% from the previous three months, the INSEE statistics agency said in a first estimate. 

The improvement means that the economy created a total 253,500 jobs last year, up 1.3% from 234,500 the previous year as France enjoyed its strongest growth since 2011.

INSEE told Reuters that job creation had not been as strong on an annual basis since 2007, before the 2008-2009 financial crisis unleashed a recession that destroyed hundreds of thousands of jobs.

Though job creation has picked up, unemployment has not dropped below 9% for six years, with many employers saying they cannot find workers with the skills they need. The manufacturing, engineering and IT sectors are among the hardest hit by a labor shortage.

A breakdown of the quarterly payrolls data for the final three months of the year showed that nearly all of the job creation came from the dominant services sector. However, the industrial sector came within a hair of not losing any jobs for the first time on records going back to 2011 with only 400 jobs lost. Meanwhile, the construction sector added 4,900 jobs.

While France is benefitting from low interest rates and a global growth rebound, companies have also responded to a more favorable business climate under President Emmanuel Macron by stepping up their hiring and investing.

Macron’s first major move as president was to give companies more freedom to set working conditions at the firm rather than sector level. He aims to follow up with a reform of training, apprenticeships and unemployment benefits in the coming months.

The former investment banker also wants to make France a “start-up nation” by setting a flat 30% tax rate on all capital income and also offering unemployment insurance for people who leave a job to go start a company.

INSEE said on Tuesday that 55,675 companies were founded in January, up nearly 20% from a year ago, though 44% of the new firms set up were self-employed workers registering as companies.