Nothing that we would say would be a concern as we get through the first, after the first quarter, but we do expect a little bit, but that’s really more an impact on utilization. But so far, I’d say spreads and bill rates are holding up and are actually have been quite resilient.
Operator: The next question comes from Josh Chan with UBS.
Josh Chan: Hi, good morning, Jonas and Jack. I guess my first question is on margins. Could you talk about in Q4 what transpired to be slightly better than you expected on a margin front? And then if you roll over into Q1, how much of that sequential margin decline from Q4 to Q1 is just reflective of typical normal seasonality and how much of the changes is anything structural or demand related?
Jonas Prising : Thank you. Yes, sure. I’d be happy to talk to that. So yes, we did come in at the higher end of our GP margin range, which was great. The way I would explain that, and you saw the year-over-year bridge on the margin, but generally as we looked at the guide, France came in a bit better. We did say that we had a bit of a cautious guide on France in the fourth quarter. So France came in a bit better, and those higher levels of activity at higher margin year-over-year in France came through, which helped the staffing margin a bit. And I’d say, PERM came in very close to what we were expecting. So what you’re starting to see, and I know you inquired on this last quarter, is did PERM peak in previous quarters at that minus 70 basis points year-over-year?
You look in Q4, you see us go to minus 30. And to your question on Q1 expectations, we continue to see that anniversary impact on PERM having a lesser impact year-over-year on the GP margin trend. So we would expect that trend to continue. It will be a less year-over-year decline into the first quarter. And as you look at the gross profit margin for Q1, at that 17.3 at the midpoint. Really, that reflects continued stable staffing margins, as I mentioned, with a little pressure in Northern Europe on some utilization issues, but I would say that’s isolated. And PERM continues at stable activity levels as we talked about. And I think that the other item with Q1 is, as I mentioned in my prepared remarks, it is typically our smallest quarter, and they get hit by some seasonal trends at all that impact the margin a bit as well when you look sequentially from Q4 into Q1.
So I’d say that’s — those are the main considerations as you think about GP margin.
Josh Chan: Okay, that’s really helpful, thank you. And then on the US, could you just comment on how you’re seeing the seasonal ramp up in this staffing business? Usually you ramp up starting in Jan 1 and kind of progresses through the next couple of months. So just any comment on the pace of that ramp up versus normal, and then if you can have any finer color on how much better the Americas decline in Q1 would be versus Q4, that would be helpful, thank you.
Jonas Prising : So I’ll take the first question, part of your question, Josh, and then have Jack jump in on the second part. So the seasonal ramp that we expect to see in the beginning of the year is a little bit slower than you would normally expect, which is not surprising given the economic headwinds that we’re seeing across Europe and the US and Canada specifically. So it is incorporated in our guide and it’s a little bit slower, of course, we’re early in the quarter, so this may all change, but that’s what we’re seeing right now.
Jack McGinnis: And Josh, I would just say on your question on the guide for the Americas for Q1. So you can see Americas overall at the midpoint at that minus 1% in constant currency. Breaking that down between North America and Latin America, what that really means for the U.S. The U.S. just completed a pretty stable trend in the second half of 2023, down 14% days-adjusted in Q3 and Q4. And we see pretty consistent levels of activity at lower levels. As we walk into Q1, that means from a year-over-year perspective, the U.S. will be high single digit decline improving. But again, and this came up earlier, a big part of that is the comparable from the prior year where the U.S. did step down in the first quarter. But I think the main takeaway is activity levels remain relatively stable.
And I’d say it’s very similar for Canada. We don’t talk a lot about Canada, but Canada has been performing very well on a margin perspective, but experiencing declines not dissimilar to what we’ve been seeing in the US market as well. So and that’s pretty consistent in the second half of the year and into the first quarter. And then Latin America continues to do very well, so we anticipate growth. Again, that’s what’s driving that only minus one for the region overall. And Latin America has been performing quite well. It’s good to see Mexico go back to double-digit growth in the fourth quarter. And we anticipate the first quarter will be a good environment for Latin America from a revenue perspective.
Operator: The next question comes from Mark Marcon with Baird.
Mark Marcon: Good morning, Jonas and Jack. I was wondering with regards to PERM, what percentage of GP is PERM currently running at?
