Unemployment rate declined, mainly thanks to cyclical economic revival

The Slovak unemployment rate in September continued to fall to new historic minimum levels, despite the traditional influx of secondary school leavers, according to an analyst.

Illustrative stock photoIllustrative stock photo (Source: Sme - Pavol Funtál)

The unemployment rate in Slovakia stood at 6.42 percent in September, down by 0.12 percentage points (p.p.) month-on-month and by 3.00 p.p. year-on-year, Labour, Social Affairs and the Family Centre (ÚPSVaR) general director Marián Valentovič said on October 20, as cited by the TASR newswire.

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The number of jobseekers immediately able to take up a job was 175,021 in September, a decrease of 3,232 individuals m-o-m and of 80,898 y-o-y, Valentovič.

The unemployment rate calculated from the total number of jobseekers amounted to 7.59 percent in September, down by 0.11 p.p. m-o-m and by 3.24 p.p. y-o-y, he added.

“The total number of jobseekers reached 206,887 in September, falling by 3,031 individuals m-o-m and by 87,208 y-o-y,” the ÚPSVaR head summed up.

Regional and age differences

As for individual regions, all Slovak regions but Žilina recorded cuts in the unemployment rate in September, with the Prešov region seeing the most significant drop (0.26 p.p.). On the district level, the unemployment rate was down in 61districts in Slovakia in September, while increases were recorded in 17 districts, and it did not change in one district. The highest unemployment rate was in the district of Rimavská Sobota (20.28 percent), with the lowest rate posted in the district of Piešťany (2.39 percent).

“In terms of disadvantaged job applicants… there was, in line with expectations, an m-o-m increase in the categories of young people, mainly graduates, where an increase of 3,117 people was recorded,” Valentovič said. “In terms of young job applicants up to 29 years of age, the increase amounted to 1,675 persons. In all the remaining categories, such as job applicants over 50 years of age, we posted a monthly drop of 1,496 persons. Similarly, in the long-term

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unemployment (more than 12 months) category, there was reported a monthly decline of 2,793 job-seekers.”

Labour offices reported 74,942 job vacancies in late September, up by 5,838 vacancies m-o-m. The highest number of jobs was available in the Bratislava region (16,703), while the lowest was in the Košice region (4,489).

Analyst sees reasons behind it all

The unemployment rate in September continued to fall, reaching new historic minimum levels, despite the traditional influx of secondary school leavers on the labour office registers, who are no longer studying, UniCredit Bank Czech

Republic and Slovakia Ľubomír Koršňák said. “Just as the number of university graduates who registered in the labour offices in the spring went down compared to previous years, the same applies to secondary school leavers in September,” he noted. This confirms the fact, according to him, that a strong labour market is capable of absorbing a significant part of fresh graduates from schools relatively quickly. Moreover, even those graduates who do register at the labour offices usually remain on the register for a much shorter time.

The unemployment rate has been falling mainly thanks to a cyclical revival in the economy, the analyst went on to say. This economic growth is relatively demanding as for labour – unlike the past decade that drew more from massive investments in modernising the economy, which increased labour productivity, and thus reduced the demands on new labour.

He further pointed to the fact that the statistics on job vacancies and employing foreigners have shown that the drop in the unemployment rate could be even more significant, but the inappropriate structure of jobseekers appears to limit this tendency.

“The growing economy should be able to generate new jobs in the upcoming months and push the unemployment rate to a new historic minimum,” Koršňák predicted.

Employing foreigners

Big regional disparities and the deepening lack of available labour in the west are also confirmed by the statistics of foreigners’s employment: in September, their number increased by 38 percent y-o-y, to 46,000. Foreigners constitute about 1.8 percent of those employed in Slovakia and are mostly concentrated in the west of the country, the analyst informed. Most of them can be found in the Bratislava, Trnava and Nitra regions, where almost three-quarters of all foreigners work.

New employees are being sought after more outside the European Union. Most foreigners now coming to Slovakia are from Serbia (almost one quarter), also marking the biggest jump in number year-on-year, followed by Ukrainians (who are fifth in number). The second, third, and fourth overall place in the number of workers imported go to Romania, the Czech Republic and Hungary.

The number of Ukrainians working in Slovakia has started to increase very dynamically mostly in recent months, after the visa duty was cancelled, Koršňák noted, adding that this trend could continue in the upcoming period.

The level of foreigners’ working in Slovakia often do not differ from those of locals: 45 percent are not even secondary school graduates (i.e. they do not have A-level school-leaving certificates), but due to higher wages in Slovakia, they are willing to travel to find a job.

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