European labor markets show divergent employment and productivity trends

European labor markets are showing diverse trends in employment and productivity. In Italy and Spain, both nations saw record employment growth between 2023 and 2026, though the quality of jobs differs. Italy’s growth is characterized by increased stability through permanent contracts in manufacturing and construction, while Spain’s growth relies heavily on ‘fijos discontinuos’—contracts that alternate between activity and inactivity.

In Poland, economic growth has persisted despite a declining working-age population. Data suggests that productivity, driven by capital investment and industrial restructuring, has been a more significant driver of GDP than immigration alone.

However, structural challenges remain across various regions. Italian companies report a significant shortage of technical and engineering profiles, with nearly half of sought-after positions remaining unfilled due to a mismatch between education and industry needs. Regional data shows mixed results: while the Marche region maintains employment rates above the national average, areas like Rieti face declining employment and a sharp drop in highly qualified young residents.