Other markets where we’ve made some big adjustments, the Nordics. You saw in our trends, the Nordics came down quite a bit from Q2 to Q3. So, we’ve made some pretty significant reductions in Norway and Sweden as part of that. I’d say those are the bigger ones. We continue to make adjustments in France as well, but I’d say, in terms of the numbers that we’re driving the bigger decreases, those would be the markets that I would highlight.
Jeff Silber: Okay. That’s really helpful. Maybe we can shift gears to the pricing environment. If we can talk about how both pay rates and bill rates are going? And are you seeing any pushback either from clients or maybe more competitive pressure?
Jonas Prising: Well, just the pricing environment remains competitive but rational. And I would say, based on the strength of the labor markets broadly, the pricing environment remains solid. And you can see that in our staffing margins, the decline that we saw of 10 basis points was really all driven by mix between various countries, not by pricing concessions. We remain very disciplined in our pricing. And the constraints on the labor markets means that the demand we have for the talent is seen as extremely valuable by our client companies, and we make sure that we are positioned in the right way with the skillsets that we provide so that we can maintain that pricing discipline. So, overall, it is rational, it is, of course, competitive, but it is still a solid and positive pricing environment for us.
Jeff Silber: Okay, thanks so much for the color.
Jonas Prising: Thanks, Jeff.
Operator: Thank you. Our next question comes from Josh Chan with UBS. Your line is open.
Josh Chan: Hi. Good morning, Jonas and Jack. Thanks for taking my questions. I was wondering if you could comment on the U.S. trend. I guess, your macro-oriented commentary seems, I guess, relatively subdued. But I guess the U.S. business saw a relatively improving trend in Q3 and you’re forecasting another improvement into Q4. So, I’m just wondering how you’re thinking about the trajectory of that business and how you feel about the U.S. business from a trend perspective.
Jonas Prising: Yeah, thanks. It’s a great question. And I’ll start maybe and then Jack can give a little bit more specificity. So, stepping back from what we’re seeing into the fourth quarter, really the change that we are observing is softening in Europe, primarily at the Manpower brand, primarily in France, and some other countries, to a lesser degree, Italy. So that’s the change as you look at the outlook. So, from a geo perspective, as you’ve noted, we see sequential stability in the third quarter heading into the fourth quarter for the U.S. And largely, that is true for all three brands. And if you step out and you look at this from a global perspective, Talent Solutions and Experis globally are sequentially stable going into the fourth quarter, and the weakness comes in Manpower. And as I just mentioned, that weakness primarily relates to weakness in Europe. But maybe, Jack, you could give a little bit more specificity on some of the U.S. business trends.
Jack McGinnis: Sure. I’d be happy to. So, Josh, I would say on the U.S. and the Manpower side, we did see slight improvement. So talking days-adjusted, I think let’s remember the days-adjusted decrease for Manpower in Q2 was minus 19%. So, quite a significant drop at that point. And that improved to minus 16% in the Q3. And we expect that to see some slight improvement in that trend. So that being said, still a pretty difficult operating environment, right? And then on Experis, very, very similar. So, in Q2, days-adjusted, we talked about being down minus 17%. That improved slightly to the minus 15% days-adjusted into Q3. And our outlook there is slight improvement into Q4. And similar to what Jonas said, what that really means is when you consider the year-ago period, we’re seeing kind of stable levels of activity going into the fourth quarter.
So, I would say still cautious. We are a bit cautious that the traditional ramp that you typically see in October and November may not materialize this year just based on continuation of the sluggish trends we’ve seen in the enterprise sector earlier in the year. But with that being said, as we anniversary the prior period, I think the rate will show some slight improvement on a year-over-year basis. And as Jonas said, I think on the Talent Solutions side, which is the biggest — Talent Solutions has the biggest impact globally in the U.S., we saw stability in RPO MSP and Right Management in the U.S. from Q2 to Q3. I talked about a bit of the normalization of perm. We do expect perm to continue to come off a bit, but it won’t come off at the same degree that it came off more significantly in the previous quarters.
So, we see the kind of stability in that at those lower levels into the fourth quarter.
Josh Chan: That’s really good color. Thank you for that. And kind of piggybacking on your last comment, Jack, on the perm coming off, I guess, obviously, that’s impacting your gross margin now, but it does sound like that there could be some sequential stability. So, I guess, how are you thinking about perm going forward? And then specifically, does that 70 basis points of gross margin headwind become kind of a peak impact or a maximum impact, if you will, going forward? How are you thinking about that?
Jack McGinnis: Yeah. I’d say it’s a fair question. It really is hard to say whether that 70 is going to be kind of the peak. I will tell you sequentially Q3 to Q4 we’re looking at GP margin going from 17.6% to 17.4% at the midpoint, so fairly close. We are starting to anniversary some of the drop in perm that we saw in the second half of last year. So I’d say, it will be — you should expect that it will likely be a lower impact on the year-over-year change as we start to anniversary those lower levels and we’ll just have to see how that continues. But I would say, it does feel like we’ve normalized quite a bit recently and we’re anticipating that into the fourth quarter guide with GP margins still holding up fairly good sequentially.
Josh Chan: Great. Thank you both for your time.
Operator: Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is open.
George Tong: Hi, thanks. Good morning. You noted demand from enterprise technology clients continued to be subdued in the quarter. Can you elaborate on where you’re seeing the weakness in tech and how tech staffing trends performed over the course of the quarter and in October to date?
Jonas Prising: Overall, George, I’d say that the demand continued to be quite weak, both in the U.S. and in Europe. And I think it’s — in terms of industry verticals that are big, especially for Experis globally and also here in the U.S., it was the tech and the communications industries that they were — the telcos, they are the ones that have seen the biggest drops. I would say, as you heard from our prior remarks here, we think things have stabilized sequentially, but at a low level, and they seem to be holding steady at least for now. And so, that’s what we’re seeing. And we have the strength in other verticals, but they are the ones that are driving the significant declines for all of our brands, but in particular for Experis at a global and at a U.S. level.
Jack McGinnis: George, I guess I would just add, I know you like to know about a little color on some of the other verticals and some of the others on the call as well. So, maybe this is a good time to maybe talk a little bit about that. So, to Jonas’ point, enterprise tech has been some of the more significant — the sector, probably, with the most significant pressure during the year on an overall basis. I would say other areas on the weaker side, we’ve talked about logistics being soft. Most of the year, that continues. I’d say, on the manufacturing side, outside of auto and food, manufacturing continues to be very sluggish. You can see that. We talked about that in terms of manufacturing PMIs in our prepared remarks. And then, I’d say construction, which is really more relevant to our European business in Norway and France has been weaker as well.
And I would say, more recently, we’ve seen banking. So, banking was strong, was relatively flattish, and I’m talking more of the U.S. market now in the first half of the year. And we’re starting to see banks pull back a bit more now as we end the third quarter. So, we see banks kind of reacting to the current environment currently. I’d say on the flip side, auto continues to be strong. You certainly see that in our Germany numbers. That is an area of strength that continues in France and Sweden as well. I mentioned food and I would say the public sector has generally been more resilient on an overall basis, although that has softened a little bit in the UK in the third quarter. So, a little more color in terms of what we’re seeing in terms of the industry verticals on an overall basis.
