The Slovak labour market has started to show signals of cooling. (source: Marko Erd)
Heavily influenced by geopolitical developments and consolidation measures, the growth dynamics of Slovakia’s export-oriented economy have been slowing down. This trend has begun to reflect in the labour market as well. Although the unemployment rate fell to record lows in the spring of 2025, employment also declined. The latter, a negative indicator signalling a cooling in the labour market, has been attributed to an excess of early retirements and a lack of qualified labour. This has, in turn, affected companies’ expansion and investment plans. Rather than the arrival of new businesses and job creation, discussions have shifted towards factory closures.
The labour market in 2024, in statistics
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The Slovak labour market in 2024 appeared to reach its peak, with the unemployment rate falling to an historic low – 5.2 percent, according to the Slovak Statistics Office, and 4.86 percent based on ÚPSVaR methodology – before stabilising. The number of job vacancies surpassed pre-pandemic levels (over 90,000 according to labour offices), while overall employment in the national economy ceased to grow. In fact, despite an influx of new foreign workers, total employment declined slightly – falling by 0.2 percent from 2.434 million to 2.430 million – partly due to a wave of early retirements.
“This also highlights some of the most pressing issues: in addition to problems with orders, demand, taxation and bureaucracy, companies are also grappling with a shortage of suitable new employees,” Michal Lehuta, a macroeconomist with VÚB Bank, told The Slovak Spectator. “This, in turn, limits their ability to expand production or invest in new projects.”
As existing workers gained a stronger bargaining position under such conditions, this also contributed to continued robust wage growth. Average wages rose by 6.6 percent in 2024, while inflation slowed to 2.8 percent, resulting in a notable increase in real wages. For comparison, average labour productivity (GDP per worker at current prices) grew by 6.1 percent year-on-year, Lehuta noted.
Early signs of labour market cooling emerge
What you will read in this article:
-Slovakia reached a record-low unemployment rate (approximately 5 percent), but this was accompanied by a severe shortage of qualified labour, hindering production expansion and investment.
-A slowdown in economic growth, fiscal consolidation, and weak industrial demand led to a decline in employment and rising redundancies.
-With a growing need to fill workforce gaps, the number of foreign workers reached a record high.
-Slovakia faces long-term structural challenges: an ageing population, the emigration of young talent, a mismatch between education and labour market needs, and persistent regional inequality.
-AI and digitalisation are reshaping job requirements, demanding rapid upskilling and adaptation from both employers and employees.
