William Malcolm

Czech Unemployment Drops In October

Unemployment in the Czech Republic fell to 3.4 percent in October from 3.5 percent in September. The Labor Office of the Czech Republic (ÚP ČR) registered 251,689 job seekers, which is approximately 10,500 less than in the previous month. According to analysts, seasonal factors, such as ongoing construction work, as well as economic recovery, are behind the October decline. In the coming months, however, with the arrival of winter, an increase in the number of unemployed can be expected, and problems in industry will probably also begin to contribute to the growth of unemployment, say analysts contacted by ČTK.

Unemployment has been falling since March. At the beginning of the year, it climbed to 4.3 percent due to limitations at the time of the coronavirus epidemic. It was last at the same level as in October last April. It reached 3.7 percent last October, and was almost 20,000 more unemployed than in October this year.

According to the Labor Office of the Czech Republic, the labor market is influenced by the demand of employers for manual and technical professions. There is also a long-term interest in qualified craftsmen. In October, according to Viktor Najmon, Director General of the Labor Office of the Czech Republic, there was an interest in seasonal workers in agriculture, horticulture, forestry and fishing, or in animal and food production and trade.

At the end of October, employers offered 352,454 vacancies through employment offices. It was about 5,500 less than in September, on the contrary, compared to last October, the number of vacancies increased by about 41,700. The highest demand for new employees is in Prague, where the supply of vacancies was over 96,100, and in the Central Bohemian Region, where employers offered 65,170 vacancies. Nationwide, there were less than one candidate per vacancy in October.

According to Deloitte chief economist David Mark, the influx of recent school leavers is waning in the labor market, but the decline in construction activity in connection with the weather has not yet manifested itself. “Thanks to this, October is usually the month with the lowest unemployment of the year (together with June). This time, moreover, the economic recovery after the pandemic is evident,” Marek said.

In the following months, according to Marek, the influence of the onset of winter will gradually begin to assert itself. “Unfortunately, the effects of the problems now facing the car industry and related industries may also begin to show. However, the share of the unemployed in the working population should perhaps not exceed four percent,” he estimated.

Unemployment is expected to rise in the coming months in connection with the slowdown in seasonal work, especially in agriculture and forestry, by the Labor Office. However, Najmon pointed out that the situation on the labor market will depend primarily on the current epidemic situation.

In October, the highest unemployment among the regions was in the Moravian-Silesian Region, where it reached 5.1 percent, followed by the Ústí Region with five percent and the Karlovy Vary Region with a share of the unemployed 4.3 percent. These three regions had the highest share of unemployed last October, which, according to the Labor Office, corresponds to their long-term economic situation. On the contrary, the lowest unemployment rate remains in the Pardubice Region, at 2.1 percent. Year-on-year, the situation changed the most in Karlovy Vary, where the share of the unemployed fell by 0.7 percentage points to 4.3 percent compared to last October.

At the end of October, the lowest unemployment among districts was in Prague-East, at 1.4 percent, in the Rychnov region it was 1.6 percent and in the Pelhřimov, Jindřichův Hradec and Benešov regions it was the same 1.7 percent. On the contrary, the highest share of the unemployed is reported by Karviná with a share of the unemployed of 8.6 percent. It is followed by Mostecko and the Ostrava-město district, where unemployment reached 6.4 percent and six percent, respectively, in October.

In an international comparison, the Czechia had the lowest unemployment rate in the entire European Union in September, according to the latest available data from the European statistical office Eurostat.