How the downturn of the economy has affected the Employment Rate.
At the very start of 2022 employment in the Czech Republic noted a 1.5% increase, in fact, the number of workers exceeded the Pre-Pandemic boom level of 5.45 million. In the second part of last year, the trend changed due to the recession that hit the Czech economy, leading to a decrease in the previous number of workers resulting in a decline in labor demand and a general pessimistic outlook regarding employment expectations. The respective decline mainly affected the trade, transportation, hotel and hospitality industry losing a total of 28,000 workers which must be added to the 15,000 people in the processing industry or “light industry”, part of the Czech Republic’s dominant sector which was also affected by the recession. In contrast, the long-term employment demand has slightly improved in the public services, communication and information sector. Overall, looking at the big picture, the total level of employment in 2022 increased at a high pace registering a growth of 1.7% but it is important to point out that the labor market in the previous year was still strongly affected by the post-pandemic, by the restrictions and the lack of increase of workers in key sectors, so the comparative basis is lower. Three-quarters of the employment growth in 2022 was caused by the service industry, in particular, employed workers in the trade, transportation, and hospitality industry increased by 26,000 and 24,000 for public services, while without considering the tertiary sector, the increase mainly was in the construction sector.
What is the nature of Unemployment in RC
In the Czech Republic the reduction of the unemployment rate, the main character of 2021, began to stop in early 2022 but despite this, there was no upward trend, in fact, data from employment offices confirmed a normal seasonal trend. However, the general unemployment rate recorded last December was close to its all-time low with a rate of 1.8% for men and 2.5% for women, and moreover, the number of long-term unemployed decreased, which in the fourth quarter of 2022 slightly exceeded 30,000 and accounted for only a quarter of the total number of all unemployed, levels similar to the last year before the pandemic. This demonstrates the fact that a large part of the unemployment in the Czech Republic is still frictional in nature therefore related to normal turnover in employment and dependent on the frequency with which workers change jobs and the time it takes to find a new one. Despite the situation, during the past year, people’s fear and apprehension about the possible growth of unemployment has increased, and the cause is mainly related to the negative perception of the country’s economic picture and the respective concern about family financial deterioration. In any case, the general discouragement and doubts do not reach pandemic peaks, and on the contrary, there has been a decrease at the beginning of 2023.
What are the prospects for 2023
Business forecasts for the Czech economy, as far as employment is concerned, have deteriorated slightly in comparison with the optimistic outlook at the beginning of 2022, and in February this year the employment rate declined, touching the lowest level recorded since March 2021, when moreover the anti-pandemic prescriptions were at their peak. The negative outlook is mainly in the secondary sector that is, industry in its sub-sectors and construction, but likewise, retail trade and the service sector do not expect much change in employment expectations from the previous year. This is confirmed by the data of January 2023 when the labor supply was less than the number of all applications, 281,000 versus 283,000 respectively, and in particular, the largest decrease in supply was for jobs requiring a minimum qualification, 23% less compared to January 2022. Certainly, this can be minimally influenced by the incipient integration of refugees from Ukraine. In addition, the number of foreigners working in the Czech Republic is steadily increasing, with 800,000 employees surveyed in November, and there are many companies choosing to hire abroad, particularly in industry, construction, and some service sectors.
Sources: https://www.kurzy.cz/
sources of images: https://pixabay.com/
graphic source: https://storyset.com/
