Unemployment rate reaches historical minimum in Slovakia

The unemployment rate, which stands at 5.72 percent, is the lowest it has been since the modern Slovak Republic came into existence.

Illustrative stock photoIllustrative stock photo (Source: TASR)

The unemployment rate in Slovakia stands at 5.72 percent, down by 0.16 percentage points (p.p.) month-on-month and 2.67 year-on-year. The number of jobseekers immediately able to take up a job was 158,444, an increase of 4,631 individuals m-o-m and a decrease of 70,221 y-o-y, said Labour, Social Affairs and the Family Centre (ÚPSVaR) head, Marián Valentovič, as quoted by the TASR newswire.

The unemployment rate calculated from the total number of jobseekers amounted to 6.97 percent in February, down by 0.15 m-o-m and 2.83 y-o-y, he added. The total number of jobseekers reached 193,321 in the second month of 2018, going down by 3,947 individuals m-o-m and 73,898 y-o-y.

As for regions, all eight Slovak regions recorded cuts in their unemployment rates in February, with Banská Bystrica and Žilina regions witnessing the most significant drops. In terms of districts, the unemployment rate declined in 75 of them, while only four districts posted a growth in unemployment.

The unemployment rate in February fell to a record-low, Labour Ministry state secretary Branislav Ondruš said, as cited by TASR. "We’ve managed to keep the unemployment rate below 7 percent,” he said, adding that the cabinet measures are helping to boost the positive development of the labour market.

Employing foreigners

The unemployment rate keeps decreasing at a time of continuing economic growth which is expected to speed up to more than 4 percent, thanks to the anticipated launch of production in the Jaguar Land Rover plant near Nitra.

Slovak companies have been complaining about lack of qualified labour in the long term, and recently, they have started employing foreigners in greater numbers. A new law, that will become effective in the beginning of May, will simplify the process of employing workers from non-EU countries in professions that lack people the most, and in regions with an unemployment rate over 5 percent, the Sme daily wrote.

Analyst sees stable cyclical growth

The unemployment rate followed expectations for February, Ľubomír Koršňák, macroeconomic analyst of UniCredit Bank Czech Republic and Slovakia, wrote: “The last time we witnessed a slight growth in the unemployment rate was in September 2015,” he noted, adding that the main reason for this development is the relatively strong and stable cyclic growth of Slovak economy.

Even after considering seasonal adjustments, the unemployment rate has marked a similar decline. The February decline was almost identical with the previous two months, Koršňák wrote.

However, we can see a slow-down in dynamics of the unemployment rate’s decline, compared to spring and summer 2017, he added, arguing that this is probably most visible on the side of labour where the inflow and outflow of the unemployed from official statistics has slowed down recently, and the number of newly unemployed and the unemployed was the lowest it has been in the past three years.

This is because in Slovakia, the demand for labour does not quite overlap with unemployment, especially in regional distribution, but also in poor education structure of the jobless, Koršnák opines, adding that the employers lacking workers are gradually decreasing their demands concerning the skills and knowledge of job applicants. The latest figures showing vacancies and import of labour from abroad prove this.

Foreign workers concentrate mostly in the west of the country, a majority coming from non-EU countries such as Serbia (25%),though this percentage has stopped growing; Romanians and an increasing number of Ukrainians are also employed here.

Outlook

The growing economy is expected to generate new jobs in the upcoming months still, and bring the unemployment rate to new, historical minimums, Ľubomír Koršňák summed up.

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