Quarterly national accounts - GDP and employment

Data extracted on 18 October 2021.

Planned article update: 19 January 2022.

Highlights

GDP up by 2.1 % and employment up by 0.7 % in the euro area in the second quarter of 2021.

GDP up by 2.0 % and employment up by 0.8 % in the EU in the second quarter of 2021.

GDP and employment growth rates, % change over the previous quarter, based on seasonally adjusted data, 2021Q2
Source: Eurostat (namq_10_a10_e)

This article presents key messages and data extractions based on Eurostat's updated estimation of quarterly gross domestic product (GDP) and employment for the second quarter of 2021 in the European Union (EU) and euro area (EA-19) released on 18 October 2021. This completes a sequence of quarterly estimates of European main national accounts aggregates (including employment) that are based on available country data (see previous news releases).

Compared to the previous release on 7 September 2021, growth rates for GDP were revised slightly for both zones (euro area from 2.2 % to 2.1 % and EU from 2.1 % to 2.0 %) while employment in persons were revised only for EU from 0.7% to 0.8%. Also revisions can be observed for some aggregates. Please note that Greek data have a series break in 2010, following a benchmark revision which started in 2020 but was not yet fully completed and that particular developments of GFCF are often related to the Irish figures and activities of MNEs.

Increases observed for GDP growth rates in main aggregates in the second quarter of 2021 follow two quarters of decreases (due to containment measures which were taking place in Member States). Eurostat has published a note on the impact of the COVID-19 outbreak on national accounts. In addition to this, guidance on quarterly national accounts (including flash) estimates in the context of the COVID-19 crisis was provided, as well as country specific metadata on the impact of the COVID-19 on GDP estimates for the second quarter of 2021.

Analysis on the impact of COVID-19 on main GDP aggregates including employment for the first quarter of 2020 is provided in the specific Statistics Explained article.


Full article


Quarterly GDP growth

GDP up by 2.1 % in the euro area and by 2.0 % in the EU

GDP increased by 2.1 % in the euro area (EA-19) and 2.0 % in the EU during the second quarter of 2021, compared with the previous quarter, according to an estimate (see Data sources below) published by Eurostat. These increases follow a decline in the first quarter of 2021 (-0.3 % in the euro area and -0.1 % in the EU). Sharpest decreases since the time series started in 1995, were observed in the second quarter of 2020 (-11.7 % in the euro area and -11.3 % in the EU).

Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 14.2 % in the euro area and by 13.7 % in the EU in the second quarter of 2021, after -1.2 % in both the euro area and in the EU in the previous quarter.

During the second quarter of 2021, GDP in the United States increased by 1.6 % compared with the previous quarter (after +1.5 % in the first quarter of 2021). Compared with the same quarter of the previous year, GDP increased by 12.2 % (after 0.5 % in the previous quarter).

Table 1: Growth rates of GDP in volume (based on seasonally adjusted data), 2021Q2
Source: Eurostat (namq_10_gdp) and (naidq_10_gdp) for JP, US data


Figure 1: GDP growth rates, % change over the previous quarter, based on seasonally adjusted data, 2008Q1-2021Q2
Source: Eurostat (namq_10_gdp) and (naidq_10_gdp) for US data

GDP growth by Member State

Among the Member States, sharpest increases were recorded in Ireland (+6.3 %), Portugal (+4.5 %), Estonia (+4.3 %) and Austria (+4.0 %) in the second quarter of 2021, while the highest decreases were observed in Luxembourg and Malta both (-0.5 %), Bulgaria (-0.3 %) and Croatia (-0.2 %).


Figure 2: GDP growth rates by Member State, % change over the previous quarter, based on seasonally adjusted data, 2021Q2
Source: Eurostat (namq_10_gdp)

GDP components and contributions to growth

During the second quarter of 2021, household final consumption expenditure increased by 3.4 % in the euro area and by 3.3 % in the EU (after -2.3 % in the euro area and -1.8 % in the EU in the previous quarter). Gross fixed capital formation increased by 1.1 % in the euro area and by 1.0 % in the EU (after +0.0 % and +0.4 % respectively). Exports increased by 2.7 % in the euro area and by 2.2 % in the EU (after +1.1 % in the euro area and +1.0 % in the EU). Imports increased by 2.8 % in the euro area and by 2.7 % in the EU (after +1.0 % in both zones).

Household final consumption expenditure had a positive contribution to GDP growth in both the euro area and the EU (+1.7 and +1.6 percentage points – pp, respectively). The contribution of gross fixed capital formation was also positive in the euro area and in the EU (+0.2 pp in both). Changes in inventories had a negative contribution to GDP growth in the euro area (-0.2 pp) and negligible in the EU. Contribution of the external balance was positive in the euro area (+0.1 pp) and negative in the EU (-0.1 pp).

Figure 3: Decomposition of GDP growth by expenditure aggregates, contributions to growth (over the previous quarter) in percentage points, 2020Q3-2021Q2
Source: Eurostat (namq_10_gdp)

Quarterly employment growth

Number of persons up by 0.7 % in the euro area and up by 0.8 % in the EU

The number of persons employed increased by 0.7 % in the euro area and by 0.8 % in the EU in the second quarter of 2021 compared with the previous quarter. In the first quarter of 2021, employment decreased by 0.1 % in both the euro area and in the EU. And the same trend is visible for hours worked, which increased by 2.3 % in the euro area and by 2.1 % in the EU in the second quarter of 2021 (after decreasing by 0.3 % and increasing by 0.2 % respectively in the first quarter of 2021).

Compared with the same quarter of the previous year, employment based on persons increased by 1.9 % in both the euro area and in the EU in the second quarter of 2021 (after -1.7 % in the euro area and -1.6 % in the EU in the first quarter of 2021). Number of hours worked increased by 16.4 % in the euro area and by 14.6 % in the EU in the second quarter of 2021 (after -3.0 % and -2.1 % respectively in the first quarter of 2021).

These data on employment provide a picture of labour input consistent with the output and income measure of national accounts.

Table 2: Growth rates of employment in persons (¹), 2021Q2
Source: Eurostat (namq_10_a10_e)


Table 3: Growth rates of employment in hours worked (¹), 2021Q2
Source: Eurostat (namq_10_a10_e)


Figure 4: Growth of employment in persons and hours worked, % change over the previous quarter, based on seasonally adjusted data, 2008Q1-2021Q2
Source: Eurostat (namq_10_a10_e)

Employment growth by Member State

Among EU Member States, the sharpest increases in employment in persons were observed in Latvia (+5.7 %), Ireland (+3.7 %), Greece (+2.8 %) and Austria (+2.1 %). Estonia (-1.1 %) and Spain (-0.9 %) recorded the highest declines in the second quarter of 2021 compared with the previous quarter.

The impact on employment in hours worked is generally much more pronounced than in persons during the COVID-19 pandemic. Latvia (+8.4 %), Portugal (+7.7 %), Croatia (+5.0 %) and Spain (+4.0 %) experienced the highest increases among Member States.

Figure 5: Employment growth rates % change over the previous quarter, based on seasonally adjusted data, 2021Q2
Source: Eurostat (namq_10_a10_e)

Employment levels

Employment in persons increased by 1.1 million in the euro area and by 1.6 million in the EU

Based on seasonally adjusted figures, Eurostat estimates that in the second quarter of 2021, 207.9 million people were employed in the EU, of whom 159.3 million were in the euro area. Employment in persons increased by 3.0 million in the euro area and by 4.2 million in the EU above the level of the second quarter of 2020 (+1.9 % in both zones). While before, the fourth quarter of 2019, recorded the highest levels in employment since the beginning of the series in 1995.

While the effect of the COVID-19 pandemic on employment in persons was mitigated by government support schemes, the impact on hours worked was generally much more pronounced.


Figure 6: Evolution of employment in persons and hours worked, index 2015=100, based on seasonally adjusted data, 2008Q1-2021Q2
Source: Eurostat (namq_10_a10_e)

Labour productivity

The combination of GDP and employment data allows an estimation of labour productivity. The analysis of growth compared to the same quarter of the previous year shows that productivity growth (based on employed persons) fluctuated around 1.0 % for both zones between 2013 and 2018. In relation to the COVID-19 pandemic, there was a sharp decline in productivity based on persons in the first and second quarter of 2020 as GDP dropped sharply while the impact on employment in persons was still relatively moderate. In the third and fourth quarter of 2020, productivity based on persons recovered from the previous sharp drop, but remained negative compared to the same quarter of the previous year. While in the first quarter of 2021, an increase was minor, a sharp increase in productivity in persons was recorded in second quarter of 2021, compared to the same quarter of the previous year with +12.0 % for the euro area and +11.5 % for the EU.

Based on hours worked, productivity compared to the same quarter of the previous year decreased by 1.2 % for the euro area and slightly increased by 0.4 % in the EU.


Figure 7: Labour productivity growth rates, % change over the same quarter of the previous year, based on seasonally adjusted data, 2008Q1-2021Q2
Source: Eurostat (namq_10_lp_ulc)

Source data for tables and graphs

Excel.jpg Detailed tables of GDP and Employment estimate 2021Q2

Data sources

Eurostat collects GDP and employment data in the framework of ESA 2010. See here for more details. Additional information on the dissemination of ESA 2010 data is available under latest news on the dedicated website and in the database section National accounts (ESA 2010) (na10)

European aggregates are revised at specific release dates. The preliminary flash estimate of GDP growth of the third quarter of 2021 will be released on 29 October 2021 and will be updated on 16 November 2021. The next regular estimates of European aggregates are due on 7 December 2021 (for both GDP and employment estimates). Revision triangles for GDP for the euro area and the EU can be found here. These revision triangles are updated once per quarter.

Please note that most EU countries carried out benchmark revisions in 2019 which were mainly introduced in September-October. While the remaining countries conducted their benchmark revisions in August-October of 2020, as well as Luxembourg in 2021. A smaller group of countries had already carried out their benchmark revisions in the earlier years (between 2016 and 2018).

For further details see the Eurostat website. Analysis explaining on how coordinated benchmark revisions has changed the annual main GDP aggregates was provided in an article in the end of October 2019.


Context

Quarterly figures on the evolution of gross domestic product (GDP) and its main aggregates are among the most significant indicators of the state of any economy, be it at a national or European level, and are of key interest to users. Typical users of quarterly national accounts (QNA) figures are market analysts, forecasters or economic and monetary policy advisors interested in assessing the state of the current business cycle.

The ESA 2010 distinguishes between two employment concepts depending on geographical coverage: resident persons in employment (i.e. the national scope of employment) and employment in resident production units irrespective of the place of residence of the employed person (i.e. domestic scope). The ESA 2010 recognises several employment measures: persons, hours worked and jobs. Eurostat publishes mainly employment data measured in persons and in hours worked.

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