Market services are sensitive to short-term economic conditions

Bénédicte Mordier, division Services, Insee

The steep rise in service-sector employment over the past thirty years does not necessarily shield the sector from cyclical downturns. The cycles observed in manufacturing and construction also affect services. Although it mainly concerns manufacturing and construction jobs, temporary work (temping) is classified under services and makes a strong contribution to the variability of employment in France. Consulting, information-technology, and engineering services, construction-machinery rental, and vehicle rental are also cyclically sensitive. Other business services are less sensitive, in particular those employing low-skilled labour and applying relatively rigid wages, such as cleaning and security services. Price adjustment is minimal and employment fluctuations are milder. Personal services are, on the whole, less sensitive to the business cycle. In fact, employment in personal and domestic services rises even during economic slowdowns. By contrast, the consumption of tourism services closely followed that of manufactured goods, at least until 2002.

Insee Première
No 1263
Paru le : 10/11/2009