Unemployment rate will continue to fall in the following months, analysts predict

Demand for production operators grew.

Illustrative stock photoIllustrative stock photo (Source: Unsplash)

The registered unemployment rate reached 7.66 percent in July. Compared to the previous month, the unemployment rate dropped by 0.10 percentage points from June’s 7.76 percent.

Explore Slovak labour market and human resource trends (for more details visit shop.spectator.sk) Explore Slovak labour market and human resource trends (for more details visit shop.spectator.sk) (Source: )

Analysts claim that such a development could be expected and the unemployment rate will continue to drop in the upcoming months. However, it is far from the pre-pandemic level.

Analysts from the National Bank of Slovakia said that demand for production operators grew. Such work positions made up almost 45 percent of all offers.

“The second-most wanted professionals were qualified workmen,” analysts added, as quoted by the TASR newswire. After the anti-epidemic measures were lifted, demand for service workers increased as well.

Increased demand for new employees

UniCredit Bank analyst Ľubomír Koršňák emphasised that the good news, given the structure of the decline in unemployment, is that in recent months, it has been helped mainly by a higher demand among companies for new employees. According to him, the labour market absorbed almost one fifth more of the unemployed in July 2021 compared to the pre-pandemic July (2019).

"The decline in unemployment was also helped by the tightening of controls on the unemployed at employment offices," the analyst said, adding that they had ruled out almost a thousand unemployed for non-cooperation.

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However, the drop in the unemployment rate cannot be attributed only to a decrease in the number of unemployed, but also a lack of data on the unemployed in statistics, according to Koršňák. In July, compared to the pre-pandemic summer, a tenth less of unemployed people were registered at labour offices.

While analysts claim that a positive development can be expected in the following months, Koršňák noted that Slovakia's unemployment rate will return to that of pre-pandemic times only very slowly. He estimates it will not happen earlier than in the second half of 2023.

“Due to long-term labour market imbalances, some regions and sectors of the economy could experience an acute shortage of suitable labour at the end of this year, provided that the third wave of the pandemic does not slow down the economy more significantly, which could once again increase pressure on wage growth and the import of labour from abroad," concluded Koršňák.

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