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Jobless rate remains stuck over 12 %

THOUGH graduation ceremonies might put some extra pressure on Slovakia’s struggling labour market as 122,000 young people leave their universities and secondary schools, economic analysts expect the country’s jobless rate to remain at its same level or even decline slightly through the remaining months of 2011. But they are also clear that the pre-crisis levels of unemployment are well beyond reach right now and will remain so for the next three or four years.

THOUGH graduation ceremonies might put some extra pressure on Slovakia’s struggling labour market as 122,000 young people leave their universities and secondary schools, economic analysts expect the country’s jobless rate to remain at its same level or even decline slightly through the remaining months of 2011. But they are also clear that the pre-crisis levels of unemployment are well beyond reach right now and will remain so for the next three or four years.

The jobless rate in Slovakia stood at 12.84 percent in May, a drop of a tenth of a percentage point from April and an 0.6 percentage point increase compared to May last year, the Labour, Social Affairs and Family Centre (ÚPSVaR) reported on June 20, with 380,016 Slovaks registered as unemployed at job centres in May and 342,410 of them immediately ready to take a job.

“In the coming month we assume stabilisation or a moderate decline in the jobless rate,” said Ivan Juráš, ÚPSVaR’s director, as quoted by the SITA newswire, adding that his office predicts a June jobless rate of 12.83 percent.

The jobless rate in May dropped in all regions except Košice Region, with the biggest drop recorded inBanská Bystrica Region.

Market watchers expected the small decrease in unemployment in May, said Eva Sadovská of Poštová Banka, adding that the drop was slightly larger that the analysts’ expectations.

“Of course, an unemployment rate revolving around 13 percent cannot be considered favourable,” Sadovská told The Slovak Spectator.

Sadovská expects that a reviving economy has helped to improve the labour market with the country’s largest employer, the industrial sector, showing renewed interest in hiring new employees from month to month. But she noted that industrial employers still do not have as many employees as before the economic crisis.

“At the same time, May is when graduates of universities start to register with the labour offices,” Sadovská stated, adding that so far 2,900 have registered with the offices, increasing their numbers to 4,668. “But the largest influx of [registered] university graduates takes place in June. The labour offices then record a higher number of unemployed for several months even after [June] since it takes some time until the graduates settle into the labour market.”

Juráš of ÚPSVaR said that his office expects that by the end of thesummerbreak about 122,000 young people will have enter ed the labour market. “Young people are having a tough time finding employment and in this aspect we are at the tail of the European Union,” Juráš said, referring to Slovakia’s weakness in bringing school-leavers and graduates into active employment. Sadovská agreed that when about one in every seven-eight economically-active Slovaks are without jobs, the job search by new graduates will be tough. Juráš told the media that ÚPSVaR and the Education Ministry are now working on developing statistics which would show which schools are adding the highest number of graduates to the jobless registry.

Sadovská said she and other economic analysts expect the upcoming months to record a gradual drop in the unemployment rate but that no one should dream about a rate lower than 12 percent for the foreseeable future, with the under 8 percent pre-crisis level being well out of reach. “We expect a return to precrisis levels only in three to four years,” Sadovská said.

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