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Unemployment rate falls to 7.74 percent in April

For the first time since 2008, the unemployment rate in Slovakia was lower than 8 percent.

Illustrative stock photo(Source: Sme - Pavol Funtál)

The unemployment rate decreased by 0.3 percentage points (p.p.) month-on-month in April and by 1.9 p.p. year-on-year, to stand at 7.74 percent, the TASR newswire wrote on May 19, citing Labour, Social Affairs and the Family Centre (ÚPSVaR) general director Marian Valentovič.

The number of jobseekers immediately able to start work was 211,104 in April, a decrease of 8,045 individuals m-o-m and of 50,810 (19.4 percent) y-o-y.

The unemployment rate calculated from the total number of jobseekers reached 9.13 percent in April, down by 0.32 p.p. m-o-m and by 2.27 p.p. y-o-y.

Meanwhile, the total number of jobseekers stood at 248,753 in April, falling by 8,805 m-o-m and by 60,830 (19.65 percent) y-o-y.

In terms of individual regions, the unemployment rate fell in all Slovak regions in April, with the Nitra region seeing the most significant drop. Labour offices reported 50,173 job vacancies in late April, up by 5,352 m-o-m, Valentovič added.

Labour Minister Ján Richter sees several projects implemented to boost employment as reasons for the drop. He also assumes that the joblessness rate might hit an all-time low this summer. “We have launched several projects, there are vacancies, there is demand from employers,” Richter opined. “Last month 1,513 long-term unemployed found a job and their number for the past year was 12,774,” he explained. “One third of the long-term unemployed who managed to find a job were unemployed in the extremely long term.”

Foreigner filling gaps

The labour minister also commented on foreigners working in Slovakia. At the end of April 26,169 people from EU countries worked here, with Romanians making up the highest portion. “There were 9,203 citizens from third countries, holders of the so-called information card, working in Slovakia in late April with foreign Slovaks from Serbia prevailing among them,” minister said, as cited by TASR. “The third category was citizens from third countries who have a permit: there were 4,830 of them.” In connection with the competition for these jobs, Richter said that foreign workers only get permits when it is impossible to find local labour after some attempts.

Prime Minister Robert Fico said that Slovakia's unemployment rate is attacking the historic 7.36 percent low from August 2008 in the jobless rate. A major challenge for the government is rather to address the shortage of skilled labour.

Analyst specifies the image

However, the lower figures in statistics are also due to the change in methodology compared to 2008 (in about 0.32 p.p.), Ľubomír Koršňák, macro-economy analyst of the UniCredit Bank for the Czech Republic and Slovakia wrote. Moreover, the unemployment rate still lags behind the absolute minimum from November 2008 – by about 0.4 p.p.. It is also the traditional start of seasonal work, which helps push down the unemployment rate – but even including this feature, the unemployment keeps declining dynamically. Behind this is a cyclic revival of domestic – but also European – economy, relatively demanding for labour.

It seems that the structure of the unemployed does not overlap with demands of employers – nor with regional distribution of the unemployed and low work mobility, and labour offices seem to be unable to supply a sufficient number of applicants. This is confirmed also by the number of vacancies and the number of foreigners working in Slovakia. This demand creates good conditions also for the decline in the long-term unemployed.

Unemployment fell in all regions of Slovakia, according to Koršňák, but most quickly in the Nitra, Prešov and Žilina regions and the slowest in the Bratislava region. In eight of 79 districts, it grew mildly m-o-m, in two it stagnated, and in the remaining 69, it declined.

The outlook seems to be positive also for the coming months, pushing the unemployment rate even closer to 2008 historical minimums, the analyst wrote.

In May and June, graduates of colleges and universities may slow-down the decline, but this effect is expected to be milder this year.

It is rather the unsuitable structure of those unemployed that hampers a more prominent drop in thre unemployment rate in most Slovak regions (especially in western Slovakia) than the lack of vacancies, Koršňák summed up.

Topic: Economics

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