Unemployment in Slovakia amounted to 5.26 percent in January 2019, up by 0.22 percent compared to December 2018, the Central Office of Labour, Social Affairs and Family (ÚPSVaR) informed.
"Traditional seasonal factors contributed to the January increase, but also some administrative and statistical factors, which contributed to its decrease before," Ľubomír Koršňák, analyst with UniCredit Bank Czech Republic and Slovakia, wrote in a memo.
The registered unemployment rate rose by 6,032 people to 144,230 compared to December 2018. At the same time, labour offices registered 80,596 jobs in January, which is a new historical maximum, Koršňák claimed.
Unemployment rate drops to historical low Read more "On the other hand, it must be said the number of available jobs could have increased at the beginning of the year because of the new legislation," he added.
Employers are obliged to report new jobs to labour offices, according to the analyst.
Nevertheless, the unemployment dropped year-on-year by 0.62 percent in January. Also, the number of foreigners working in Slovakia dropped by 229 people to roughly 68,900 in January 2019.
A two-speed economy
"The slowdown of economic growth in Europe (and in Slovakia) has spilled over to the figures," Koršňák said.
At the same time, the demand for labour force is still growing, although the number of the unemployed at labour offices is also rising.
"The increase of unemployment at the turn of each year is nothing unusual, and it repeats," Koršňák claimed. This is a result of people changing their jobs and regional disparities on the labour market.
Poorer regions with higher unemployment have been hit by the slowdown more severely compared to western Slovakia, where the deceleration is mitigated by the car industry.
Economic growth was disappointing at the end of the year Read more Rimavská Sobota reported the highest unemployment rate in Slovakia, with 16.22 percent. By contrast, Trenčín registered the lowest unemployment rate, amounting to 1.92 percent.
Regarding the regions, Prešov Region reported the highest increase in unemployment, 0.47 percent, ÚPSVaR informed.
Outlook
"The decelerating economy will be generating even fewer jobs and the local labour market will be gradually cooling down," said Koršňák.
New jobs should be created in western Slovakia, which is the region lacking the labour force. Therefore, companies will be forced to import the labour from abroad. In poorer regions, 2019 will see an increase in unemployment.
"The heterogeneity of the labour market in Slovakia, where two parallel markets operate, should thus increase even more," Koršňák claimed.
