Unemployment in the Czech Republic rose to 3.4% in August from 3.3% in July
Prague – Unemployment in the Czech Republic rose to 3.4 percent in August from 3.3 percent in July. 251,753 people were looking for work. Employers offered more than 312,000 vacancies. The data was published today by the Labor Office of the Czech Republic. According to him, a slight increase in unemployment is common during this period. Last August, unemployment was 3.6 percent, with almost 268,000 people without work. The rise in unemployment is linked to a cooling economy and signals an impending recession, analysts said.
“During September, we can expect a revival of the labor market. Furthermore, it is a month when the main wave of graduates comes to the evidence of the Labor Office of the Czech Republic and seasonal work gradually depends on the weather,” said Viktor Najmon, director general of the Labor Office of the Czech Republic. Unemployment may thus increase slightly in the coming months, which, according to Nejmon, corresponds to the classic development curve.
According to the sources of the office, a total of 112,521 citizens of Ukraine have found work in the Czech Republic since the outbreak of the conflict in Ukraine in February. But some of them have already returned home or left their jobs. By the end of August, 80,676 Ukrainians were working in the Czech Republic with temporary temporary protection.
During the war in Ukraine, 20,379 foreigners under temporary protection registered at the labor offices. Among other things, the office offers them help with financing Czech language courses. “It is precisely the language barrier that is one of the most common obstacles to the performance of qualified professions,” said Najmon. Ukrainians most often as assembly workers of products and equipment or helpers in construction, production and transport.
In addition to the conflict in Ukraine, in the coming months the situation on the labor market will also be influenced by the current epidemic situation and the effects of the energy crisis on employers, according to the ÚP CR. In August, to a lesser extent, recent school graduates also started to report as job seekers, but unemployment has not had a significant impact so far.
The highest proportion of unemployed was at the end of the holidays in the Ústí Region, namely 5.2 percent. The Moravian-Silesian Region followed with an unemployment rate of 4.9 percent. On the contrary, unemployment in the Pardubice and South Bohemian Regions was 2.5 percent, the lowest in the Czech Republic.
Among the individual districts, Praha-východ is the best with an unemployment rate of 1.4 percent. The districts of Pelhřimov, Benešov, Praha-západ, Jindřichův Hradec and Rychnov nad Kněžnou also fell below two percent. At the opposite end of the table is Karvinsko, where the share of unemployed is 8.2 percent. They are followed by Mostecko with unemployment of 6.7 percent and Chomutovsko with 6.1 percent.
In the Czech Republic, there are on average 0.8 job applicants per job vacancy. For more than 70 percent of vacancies, employers require applicants with a basic or lower education. For example, they are looking for building construction workers, forklift operators, assembly workers, truck and tractor drivers, other production support workers, bricklayers, stove and tilers or mechanical equipment assembly workers and cooks. There is still interest in seasonal workers in agriculture, horticulture or forestry.
The average age of the unemployed was 43.6 years in August, compared to 43.4 years last year. The age structure of job seekers has not changed significantly over the past five years. People with lower qualifications were most often without work, especially those with an apprenticeship without maturity and with a basic education. The average length of registration at employment offices was shortened by 19 days to 495 days compared to July.
In August, 42,324 people were newly registered with the Labor Office of the Czech Republic, a month-on-month increase of 7,478. The largest number of people were added to the register from Prague and Central Bohemia, in both cases there were more than 5,500. At the moment, people applying for job mediation are mainly people who come, for example, from the fields of education, retail and wholesale, from the fields of public administration, health care, manufacturing motor vehicles or the production of food products.
78,960 people received unemployment benefits in August, which is 31.4 percent of all job seekers. On average, they received 9,928 crowns per month. 16,664 unemployed receive support of up to 4,500 crowns. The maximum amount of support, i.e. 21,488 crowns, was then paid by the ÚP CR to 3,654 job seekers.
Development of unemployment in the Czech Republic:
July 2022 | August 2022 | |
Share of unemployed (in pct) | 3.3 | 3.4 |
Number of unemployed | 240,706 | 251,753 |
Number of vacancies | 313,250 | 312,327 |
Source: ÚP CR
Analysts: The August increase in unemployment signals an impending recession
The August increase in unemployment is related to the cooling of the economy and signals an impending recession. It will probably continue to grow slightly in the autumn, mainly due to layoffs due to high energy prices. Analysts contacted by ČTK today agreed on this. The Labor Office of the Czech Republic announced today that unemployment in the Czech Republic rose to 3.4 percent in August from 3.3 percent in July. School graduates and Ukrainians who entered the labor market also contributed to the August increase. Nevertheless, according to analysts, unemployment is not the main problem of the Czech economy.
“The development in August was the worst since 1998. In recent years, this has been significantly reflected in the drop in unemployment, and the last year when the opposite development was recorded was 2013. Even then, however, the increase in the number of people without work did not reach this year’s value,” said UniCredit Bank analyst Pavel Sobísek. According to him, this confirms a certain signal of turnover in the labor market. “The turnaround is undoubtedly related to the cooling of the economy and it can be concluded that we are on the threshold of recession,” he added.
The August data represent the first mild warning that even the notoriously overheated Czech labor market is not completely invulnerable, added Cyrrus analyst Vít Hradil. The increase in the unemployment rate is mainly influenced by the worsening energy crisis, said Martin Jánský, junior director general of the staffing agency Randstad CR. Rising inflation and price increases are forcing companies to save money and reduce recruitment, and some companies have even begun to lay off workers. According to him, another factor is the seasonal fluctuation. Candidates from the ranks of secondary and high school graduates, as well as, for example, people who resigned at the end of the school year, often use the summer vacation to look for a new job and wait until the end of August or early September, he noted.
Generali Investments analyst Radomír Jáč pointed out that the labor market statistics for August this year were also influenced by the fact that a higher number of citizens of Ukraine registered in the register of job applicants. According to him, due to the cooling of the Czech performance that can be expected for the second half of this year, the unemployment rate may start to grow in the final months of this year. By the end of the year, an increase in unemployment above four percent is likely, so it will probably be slightly higher than in pandemic 2020, Creditas Bank analyst Petr Dufek estimated.
Unemployment in the Czech Republic is not a problem so far, it is practically the lowest in the EU, pointed out PwC CR human resource management expert Andrea Palánová Linhartová. However, the first warning signs are beginning to appear that a number of companies will not be able to withstand the current rise in energy prices and high interest rates, which make operating financing more expensive for companies. He therefore expects a wave of company bankruptcies and layoffs during the fall and winter. However, it does not present any catastrophic scenario. The unemployment rate, even with slow growth, will not be the main thing burning the Czech economy, she pointed out.