Slovakia has the lowest number of jobless people in history

The unemployment rate is expected to keep falling, but the lack of qualified workers remains a problem.

Illustrative stock photoIllustrative stock photo (Source: TASR)

The unemployment rate continued decreasing also in the beginning of summer. The registered jobless rate in July dropped to 6.70 percent from June’s 6.90 percent. In annual terms, it was lower by 2.74 percentage points, the Central Office of Labour, Social Affairs and Family (ÚPSVaR) stated.

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“In terms of historical development, I’m glad we’ve reached the under 8-percent threshold for the first time,” said Labour Minister Ján Richter, as quoted by the TASR newswire. “It’s pleasing to hear that Eurostat also noted, in regards to the previous month, that the unemployment rate Slovakia was below the EU average in June.”

As for absolute numbers, in July the labour offices registered altogether 182,754 people ready to take a job immediately, down by 187,997 people in comparison with June, and 256,460 people less when compared to July 2016.

The unemployment rate calculated from the total number of jobless accounted for 7.91 percent in July, which represents 215,495 people. It was lower by 0.23 percentage points month-on-month (down by 6,438 people), and by 3.05 percentage points year-on-year (down by 82,154 people), according to ÚPSVaR statistics.

The jobless rate dropped in six out of the eight regions in Slovakia, with the Prešov Region posting the highest drop (by 0.46 percentage points). The region, however, still has the highest unemployment rate (10.85 percent). It is followed by the Košice Region (10.79 percent) and the Banská Bystrica Region (9.68 percent).

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What do analysts say?

The start of the holiday season slightly cooled down movements in the labour market, according to Ľubomír Koršňák, analyst with UniCredit Bank Czech Republic and Slovakia. The influx of new job seekers in the labour offices’ statistics slowed down. The same trend could be seen in the number of unemployed who found a job or were removed from the register for other reasons, he wrote in a memo.

“The unemployment rate, however, continued falling in the beginning of summer, though the dynamics of its decrease compared with previous months have slowed down,” Koršňák commented.

One of the factors influencing the drop in the number of jobless is the economic revival. The current economic growth is relatively demanding in terms of labour force when, compared with the past, it does not take advantage of the investments in economic modernisation that used to increase labour productivity and decrease the demands on the new labour force.

“It seems that the more significant drop in unemployment is not prevented by the lack of job offers, but rather the inappropriate structure of jobseekers,” Koršňák opines.

He adds that employers are still struggling to recruit suitable people for empty positions, while they are gradually lowering their demands on new employees. This means that every year, the number of free positions also suitable for people with lower vocational education or even people with basic education, is increasing. The most unoccupied positions are in industry.

“If all free positions in Slovakia had been filled by unemployed people registered with the labour offices, the jobless rate would have stood at only 4.46 percent in July,” Koršňák opines.

As for the following months, he expects the jobless rate to continue decreasing.

Katarína Muchová, an analyst with Slovenská Sporiteľňa, shares this opinion. She also warns of the discrepancies between supply and demand, as well as the lack of a qualified labour force.

“This discrepancy is eased by workers from abroad,” Muchová wrote in a memo.

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