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Slovak unemployment rate hits new record

But the lowest unemployment rate since Slovakia became independent in 1989 has its downsides as well.

Looking for a job(Source: Sme)

The unemployment rate in Slovakia for April stood at 5.42 percent – historically the lowest figure since Slovakia became independent in 1989, the Pravda daily wrote on May 19.

This means it is down by 0.13 percentage points (p.p.) month-on-month and by 2.32 p.p. year-on-year.

The number of jobseekers immediately able to take up a job was 149,611 in April, a decrease of 4,243 individuals m-o-m and of 29.13 percent y-o-y. The total number of jobseekers reached 183,518 in the fourth month of 2018, going down by 2.26 percent m-o-m and by 26.22 percent y-o-y.

“As for the unemployment rate, calculated from the total number of jobseekers, it also posted a decline in April – to 6.65 percent – which was a total of 183,518 people,” Labour, Social Affairs and the Family Centre (ÚPSVaR) general director Marián Valentovič said on May 18, as quoted by the TASR newswire. The figure declined by 0.12 p.p. m-o-m and by 2.48 p.p. y-o-y.

All eight Slovak regions recorded cuts in their unemployment rates in April, with the Banská Bystrica region seeing the most significant drop.

Job vacancies also increasing

On the other hand, there are already 80,000 job vacancies that are almost impossible to fill with domestic qualified labour – despite those who remain unemployed, Pravda wrote.

The decline in the unemployment rate has been slowing-down further, macro-economic analyst of the UniCredit Bank Czech Republic and Slovakia, Ľubomír Koršňák, wrote in a memo, adding that April was the slowest since summer 2016. Currently, the slow-down is merely caused by classical seasonal impacts.

The seasonally adjusted unemployment rate (UniCredit Bank calculation) decreased “only” by 0.08 p.p. – to 5.43 percent which was its mildest decline m-o-m since 2016.

The figures reflecting this development at the labour office have also shown a lazier labour market in recent months. The number of jobless posted on the labour market has been gradually declining in recent months, and in April, it was the lowest (seasonally adjusted, UniCredit Bank calculation) for more than five years, Koršňák wrote.

What are the reasons?

He sees the reasons for the slow-down on the labour market remaining mainly with the offer of labour failing to match the jobs on offer (especially from a geographical point of view). However, natural economic development has had an ever-stronger impact, too. The economy (except for the automotive industry) has come close to its cyclic climax and thus, the demand for new labour has started to weaken naturally. The number of job vacancies only confirms both these hypotheses, according to the analyst.

The number of vacancies hit a new historical maximum in April, increasing by more than 3,000 – to 80,600. If all the vacancies could be filled with the domestic unemployed people registered at labour offices, the rate of the unemployed immediately ready to take on a job would be 2.49 percent in April (and 2.76 percent in March).

Koršňák is of the opinion that this is very improbable, though, as the vacancies do not overlap with the offer of labour registered at offices. New jobs are concentrated in the southwest and west of the country, while the unemployed are concentrated in the centre of southern and eastern Slovakia.

The outlook is not surprising

The growing economy should be able to generate new jobs in the upcoming months and thus push the unemployment rate to new historical minimums. But the dynamics of its decline are expected to slow further – also due to the beginning of the cyclic deceleration of the growth of part of economy, excluding the automotive sector.

It will still hold true, though, that in the west of the country, further decline in the unemployment rate is hampered, among other things, by insufficient offer of appropriate labour which is almost non-existent in some districts there, Koršňák summed up.

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Topic: Economics


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