Jobless rate dropped below 5 percent again

Analysts do not expect it to rise significantly due to economic slowdown.

Illustrative stock photoIllustrative stock photo (Source: Sme)

After the jobless rate in Slovakia increased slightly to over 5 percent in September, it dropped again in late October.

The registered unemployment rate amounted to 4.94 percent, down by 0.1 percentage point month-on-month. In annual terms, it fell by 0.29 percentage points, according to the data presented by the Central Office of Labour, Social Affairs and Family (ÚPSVaR).

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The labour offices registered altogether 136,192 people ready to take jobs immediately.

“Although the economic indicators suggest the economic slowdown, the labour market has not responded to it yet,” said Labour Ministry’s State Secretary Branislav Ondruš (Smer), as quoted by the SITA newswire.

The labour market is not oversaturated yet, since the demand for labourers is still higher than the supply. He does not expect a negative development in unemployment numbers in the near future, as reported by SITA.

Analysts do not expect a significant increase

Slovenská Sporiteľňa analyst Katarína Muchová opines that the slower economic growth already has an impact on the labour market, though it is not big.

“The monthly data suggest its effect on employment (or its drop) particularly in industry, retail and wholesale,” she said, as quoted by SITA. “However, the number of available jobs is still quite high, particularly in western Slovakia.”

The situation will not change significantly this year, with the jobless rate oscillating around 5 percent.

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The unemployment rate will be negatively affected mostly by weaker foreign demand, and thus weaker industrial production, said Poštová Banka analyst Lucia Dovalová.

“This will be reflected in our labour market with a certain delay, in the form of the lower creation of new jobs,” she told SITA. “As a result, the regional gaps in unemployment rate may widen.”

In her opinion, unemployment rate will stagnate, unless the external risks are eliminated.

Ľubomír Koršňák, analyst with UniCredit Bank Czech Republic and Slovakia, does not expect the jobless rate to drop significantly in the following months either.

“However, we don’t expect a more significant increase in unemployment rate either since the current economic growth is much more demanding on the new labour force than a decade ago,” he said, as quoted by the TASR newswire.

In his opinion, new jobs will be added mostly in western Slovakia, where the reserves of the available labour force have already been exhausted. This prevents a further drop in the jobless rate in this region, he added.

The unemployment rate may increase slightly in economically weaker regions at the turn of the years.

He also expects that due to weak labour mobility, many employers in western Slovakia will have to bring staffers from abroad or forced to reassess their expansion plans in this region.

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