Czech Labour Market Sees Rising Employment and Wages in Q2 2025

fletcher@cijeurope.com
8 September 2025
Jobs

The Czech labour market showed stronger momentum in the second quarter of 2025, with both employment and wages recording notable year-on-year gains, according to fresh data from the Czech Statistical Office (CZSO).

Average gross monthly wages rose by 7.8% to CZK 49,402, with real wages increasing by 5.3%, reflecting the impact of moderate inflation at 2.4%. The increase marked the strongest real wage growth since early 2024, as employees gradually regain purchasing power lost during the inflationary surge of 2022.

Employment rose by 76,200 people (1.5%) year-on-year, bringing the total workforce to 5.24 million. The growth was driven primarily by women and older workers: the number of employed women increased by 122,600, partly due to Ukrainian refugees entering the labour market, while employment among people aged 60+ expanded significantly, up by 52,200.

The services sector was the key driver of job creation, adding 88,000 positions. Notably, employment in arts, entertainment, and recreation grew by 24.3%. In contrast, jobs in manufacturing, agriculture, and transport continued to decline. Despite ongoing contractions, manufacturing remains the country’s largest employer, with more than one million workers.

Unemployment edged up slightly to 2.8%, affecting 146,100 people, though the rate remains among the lowest in Europe. Regional disparities persist: the Ústecký Region recorded the highest unemployment (4.8%), while Prague and the Středočeský Region had the lowest (1.5%). Long-term unemployment also rose to 44,800, increasingly affecting workers over 60.

In terms of earnings, wage growth varied widely across industries. The fastest increases were in professional, scientific, and technical activities (+12.7%), construction (+11%), and real estate (+10.9%). Workers in information and communication (CZK 87,477) and financial services (CZK 84,702) continued to earn the highest wages, while accommodation and food services remained the lowest-paid sector (CZK 29,270).

The median wage reached CZK 41,115, up 7.2% year-on-year. However, gender disparities persist: men’s median wage stood at CZK 44,465, about 15% higher than women’s at CZK 37,935.

Regional wage differences were narrower, with all areas seeing nominal growth between 5.6% and 8.2%. Prague remained the country’s highest-paying region with an average wage of CZK 62,307, while Karlovy Vary recorded the lowest at CZK 41,944.

Analysts note that if the current pace of nominal wage growth continues and inflation remains subdued, Czech wages could surpass their 2019 real level by the end of this year.

Offices in Poland: Regional Demand Surges as New Supply Stays Scarce

Demand for office space in Poland is rebounding, with regional markets showing especially strong leasing activity while new supply remains limited. Warsaw continues to see the largest inflow of new projects, but recent data suggest that cities such as Kraków, Wrocław and the Tri-City are increasingly competing with the capital in terms of absorption.

According to market trackers, leasing activity across Poland’s eight largest regional markets reached almost 217,400 square metres in the second quarter of 2025, marking a record quarterly result and a year-on-year increase of around 50 percent. In total, nearly 390,000 square metres was leased in regional cities in the first half of the year. Kraków recorded the highest level of activity, with more than 170,000 square metres leased by mid-year, putting it on par with Warsaw in the second quarter. Wrocław saw agreements for more than 80,000 square metres, while demand in the Tri-City exceeded 50,000 square metres. Much of this activity came from renewals, as tenants preferred to extend existing contracts rather than relocate, reflecting both cost considerations and a cautious approach to expansion.

In Warsaw, gross take-up in the first half of the year was close to 300,000 square metres, similar to the level seen a year earlier. Second-quarter leasing amounted to about 155,000 square metres, again dominated by renegotiations. At the same time, new completions in the capital reached approximately 85,000 square metres in the first half of 2025, the highest half-year figure since 2022. The most notable projects included The Bridge, a 47,000 square metre tower delivered by Ghelamco, and Office House, a 27,800 square metre building that forms part of the Towarowa 22 mixed-use complex. With these completions, Warsaw’s vacancy rate has remained stable at around 10.8 percent, with availability in the city centre dropping below 8 percent as tenants continued to favour high-quality, centrally located space.

By contrast, regional markets saw almost no significant new supply during the first half of the year. Only a small project in Poznań was completed, underlining the reluctance of developers to break ground amid high construction costs and vacancy rates that still average more than 17 percent across the regions. Nationwide, around 330,000 to 350,000 square metres of offices are currently under construction, split between roughly 140,000 square metres in Warsaw and 209,000 square metres across regional cities. In Kraków, about 65,000 square metres of new space is underway, while Poznań has more than 50,000 square metres under construction.

Looking ahead, Warsaw is expected to see the delivery of further large projects in the second half of the year, including V-Tower and Studio A, which will add more than 50,000 square metres combined. Other landmark schemes currently underway include Skyliner II, Upper One and additional phases of the Towarowa 22 and VIBE complexes. Outside the capital, the pipeline remains limited, suggesting that supply constraints will support rental stability in prime regional projects even as overall vacancy stays high.

The outlook for Poland’s office sector highlights a two-speed market. In both Warsaw and the regions, occupiers are focusing on prime, ESG-compliant properties in central locations, while older stock in peripheral areas continues to face weaker demand. With leasing led by renewals and expansions from IT and business services companies, the market appears to be stabilising after several years of adjustment. The limited pipeline should allow landlords of top-tier assets to maintain pricing power, while tenants in outdated buildings will continue to hold greater leverage.

Source: comp.

AI Emerges as Key Driver of Energy Efficiency in Real Estate

Artificial intelligence (AI) is playing a transformative role in helping the real estate sector reduce greenhouse gas emissions and improve operational efficiency, according to a new KPMG report.

Buildings account for nearly 40% of global emissions, with heating, cooling, and power consumption making up 27%. As urbanization accelerates – with 68% of the world’s population projected to live in cities by 2050 – the decarbonization of real estate is seen as critical to climate action.

KPMG’s Global Decarbonization Hub highlights that AI-driven solutions, especially human-centric AI, can deliver measurable results. For example, AI-powered software such as “Jenny” has achieved energy savings of more than 240,000 MWh, reduced greenhouse gas emissions by 90,000 tonnes, and generated €26 million in cost savings for real estate managers across 23 countries.

Case studies show how AI can autonomously optimize HVAC systems in commercial properties, making adjustments every 15 minutes based on weather forecasts, occupancy patterns, and energy market fluctuations. In one 10,000 m² office building, AI reduced heating consumption by over 60% while maintaining comfort standards. A shopping center of 60,000 m² achieved a 70% reduction in heating valve use and near 100% indoor climate comfort.

Experts from Tallinn University of Technology, Eduard Petlenkov and Juri Belikov, stressed that AI’s success depends on reliable, explainable systems that prioritize human comfort and trust. “By adhering to human-centric AI principles, building control systems can create healthier, more comfortable, and sustainable indoor environments,” Belikov noted.

The report underscores that AI alone is not enough: strategic energy management (SEM) frameworks are required to maximize impact. SEM integrates organizational change, training, and holistic efficiency planning with technology, enabling up to 30% annual energy savings in some buildings.

“AI is no longer a ‘nice to have,’ it is an essential strategy for cutting emissions, mitigating climate risk, and future-proofing real estate portfolios,” said Francesca Galeazzi, Partner for Real Estate, ESG & Climate at KPMG Germany

GCC Equity Markets Retreat in August as Oil Prices Weigh on Sentiment

Equity markets across the Gulf Cooperation Council (GCC) declined in August, reversing gains from the previous two months, as falling oil prices and sector-specific pressures weighed on investor sentiment, according to Kamco Invest’s latest GCC Markets Monthly Report.

The MSCI GCC index dropped 2.3% during the month, erasing July’s recovery and reducing year-to-date gains to just 1.4%. The downturn was led by Abu Dhabi, where the FTSE ADX Index fell 2.7%, followed by Saudi Arabia’s Tadawul (-2.0%) and Dubai’s DFM (-1.6%). Kuwait’s All-Share Index slipped 1.4%, while Qatar and Bahrain recorded marginal declines. Oman was the only market to post a gain, advancing 5.2% .

The correction came despite positive trends in global equities, with the MSCI ACWI up 2.4% in August on the back of gains in the US, Europe, and emerging markets. However, GCC investors reacted to a 6.1% monthly drop in oil prices, driven by oversupply concerns and slower demand recovery.

At the sector level, performance was mixed. The GCC Materials index gained 4.3%, supported by Saudi heavyweights such as SABIC (+6.0%) and Advanced Petrochemicals (+4.0%). Pharma & Biotech and Diversified Financials followed with increases of 3.9% and 2.7%, respectively. In contrast, Insurance led the losers with a 7.2% drop, while Healthcare and Real Estate fell 3.9% and 2.7%, respectively. Banking stocks were also weaker, down 2.4% .

Saudi Arabia’s Tadawul recorded its sharpest year-to-date decline in the region at -11.1%, reflecting weaker earnings announcements, oil price pressures, and geopolitical uncertainties. Conversely, Dubai remained the strongest performer in 2025 with a 17.5% gain, underpinned by strength in real estate and consumer sectors earlier in the year.

Trading volumes were also lower across several markets. In Saudi Arabia, share trading volumes fell nearly one-third month-on-month, while Abu Dhabi’s traded value dropped 25.6%. Dubai and Bahrain also reported slower activity, whereas Oman saw trading values rise by nearly 13% .

The report underscores ongoing divergence within GCC markets: while Oman and Dubai benefit from localized growth drivers, Saudi Arabia and Abu Dhabi remain sensitive to oil price fluctuations and global risk sentiment.

Sonar Development Secures Permits for Eschborn Residential Conversion

Sonar Development, the project development arm of the Sonar Group, has received building permits for the planned conversion of two vacant office properties in Eschborn into residential accommodation. The permits, covering the sites at Eschborner Hauptstraße 71–79 and 87, were granted without restrictions and within the statutory timeframe.

The project, undertaken on behalf of an institutional investor, will deliver around 200 residential units and contribute to addressing the region’s housing shortage. The development concept emphasizes sustainability, with the existing building structure retained to conserve embodied energy and reduce land consumption. Refurbishment work will target compliance with the KfW 55 energy-efficiency standard.

“The granting of the building permits marks an important milestone for our project,” said Steffen Wittwer, Managing Director of Sonar Development. “We would like to thank the entire planning team for their professional collaboration and the authorities – particularly the City of Eschborn, the Urban Planning Office and the Building Control Authority in Hofheim – for their timely processing. With this momentum, we are now entering the next phase of converting office space into contemporary housing.”

Sonar has appointed Ed. Züblin AG as main contractor for the project. “The conversion of existing buildings into modern housing makes an important contribution to sustainable urban development,” said Mark Simon-O’Sullivan, Project Director in Züblin’s Building in Existing Structures division. “We appreciate the trust placed in our expertise in transforming complex properties.”

Construction is scheduled to begin later in September.

Germany Switches On Europe’s Fastest Supercomputer ‘Jupiter’

Germany has officially launched Jupiter, Europe’s fastest supercomputer, at the Jülich Research Centre in North Rhine-Westphalia. The system is also ranked fourth worldwide on the Top500 list of the most powerful computers, underscoring Europe’s ambition to close the gap with the United States and China in high-performance computing and artificial intelligence.

Chancellor Friedrich Merz described the inauguration as a milestone for Germany’s role in digital technology. “We want Germany to become an artificial intelligence nation,” he said, adding that the 2020s could be remembered as the “decade of artificial intelligence.”

Jupiter – short for Joint Undertaking Pioneer for Innovative and Transformative Exascale Research – is the first European system designed to exceed one exaflop of performance, meaning it can carry out over one quintillion (10^18) calculations per second. This capability makes it vital for training advanced AI models, running complex climate and weather simulations, and enabling new breakthroughs in areas such as medical research and energy systems.

According to Astrid Lambrecht, chair of the Forschungszentrum Jülich board of directors, Jupiter is also the world’s most energy-efficient exascale-class system. “At a time when digitization and AI demand more and more energy, Jupiter shows how sustainable computing can be achieved,” she said. The machine uses advanced water-cooling and modular architecture designed by France’s Atos (Eviden) and U.S.-based NVIDIA, which supplied its cutting-edge Grace Hopper superchips.

The project cost around €500 million, with half the funding provided by the European Union and the remainder split between the German federal government and the state of North Rhine-Westphalia. The investment is part of the EuroHPC initiative, which aims to give Europe sovereign capacity in high-performance computing.

Beyond AI development, the system will be used to improve extreme weather forecasting, such as predicting floods and heatwaves, and to advance neuroscience research by modeling brain function for new therapies.

Jupiter’s launch also highlights Europe’s growing presence in the global supercomputing race. According to the latest Top500 ranking (June 2025), two of the world’s top 10 machines are in Europe: Jupiter in Germany at number four and Leonardo in Italy at number 10. By comparison, the world’s fastest system remains Frontier in the U.S., capable of over 1.1 exaflops.

While acknowledging concerns over AI, Lambrecht stressed that fears of machines gaining human-like consciousness are misplaced. “Large AI models still fail in logical reasoning,” she told DPA. “In the medium term, it is not realistic to expect them to develop their own awareness.”

With Jupiter now online, Europe has taken a major step toward technological sovereignty, giving its scientists and industries access to a tool designed to compete at the very top level of global computing power.

Anthropic to Pay $1.5 Billion to Settle Writers’ Copyright Lawsuit

U.S.-based artificial intelligence company Anthropic has agreed to a $1.5 billion settlement to resolve a class-action lawsuit brought by a group of authors who accused the company of using their books to train its Claude chatbot without permission. The settlement, covering around 500,000 works, would compensate authors with an average of about $3,000 per book. It now awaits approval from a federal court in San Francisco, according to Reuters.

The agreement, first announced in August without details, is expected to be the largest publicly disclosed copyright enforcement settlement involving generative AI to date. Judge William Alsup, who is overseeing the case, scheduled a hearing for Monday to review the terms.

The lawsuit was filed last year by authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson. They argued that Anthropic had illegally used millions of books to train its Claude system. In June, Judge Alsup ruled that while Anthropic could use certain materials for training, the company infringed copyright by placing more than seven million books into a central repository not intended solely for training purposes.

The trial had been scheduled for December, but by agreeing to settle out of court Anthropic has avoided what could have been an even more costly judgment.

The case is part of a wider wave of litigation against technology companies such as OpenAI, Microsoft, and Meta, which face lawsuits over the use of copyrighted content to train generative AI systems. These systems, which generate text or images based on large datasets, have surged in prominence since OpenAI’s ChatGPT drew global attention in late 2022.

Anthropic, founded in 2021 by former OpenAI employees, launched its Claude chatbot in 2023. The company has attracted investment from major backers including Amazon and Alphabet. This week, it was valued at $183 billion following a new funding round.

FedEx Express Opens Regional Head Office in Riyadh, Expands Middle East Operations

FedEx Express has inaugurated its new global head office in Riyadh, marking a major step in expanding its Middle East operations. The office will oversee activities in Saudi Arabia, Bahrain, Qatar, and Kuwait.

The launch was announced at a ceremony in Diriyah attended by Saudi Transport and Logistics Minister Saleh Al-Jasser and FedEx President and CEO Raj Subramaniam. The event underscored Saudi Arabia’s ambitions to become a leading logistics hub under the Vision 2030 strategy.

As part of the expansion, FedEx will introduce its first nonstop flights to Riyadh from both the United States and Europe, making it the only express logistics company currently offering such direct services. The first flight is scheduled to land at King Khalid International Airport this week, with six weekly flights planned. These services will strengthen trade connectivity between Asia, Europe, and the Americas.

In Saudi Arabia, FedEx will directly manage pickups, deliveries, and customs clearance through four operational stations, while also offering digital shipping tools. Its services will span freight by air, road, and sea, as well as customs brokerage and cargo transit support. The company also plans to establish a regional hub at the upcoming King Salman International Airport, designed to boost logistics capacity and improve services for local businesses.

FedEx highlighted that these investments align with Saudi Arabia’s economic diversification goals. By enhancing supply chain infrastructure, the company aims to create new opportunities for local industries, expand access to global markets, and support job creation. The move comes as Saudi Arabia reported a trade surplus of $16.8 billion in the first quarter of 2025, a 52 percent increase compared with the previous quarter, reflecting growing demand for advanced logistics solutions.

The Riyadh opening follows a string of regional investments by FedEx, including a $350 million hub at Dubai World Central Airport featuring advanced sorting technology and cold storage, as well as expanded projects in Qatar and Vietnam to improve shipping efficiency for Middle Eastern importers.

UK Food and Drink Industry Faces Stricter Health Regulation

The UK is reshaping its food and drink regulation with an increasing focus on public health, nutrition, and consumer awareness. Both England and Scotland have unveiled long-term strategies to reform the food system, backed by measures ranging from restrictions on unhealthy product promotion to tighter scrutiny of baby foods and ultra-processed products.

England’s Fit for the Future strategy, published in July 2025, sets out plans to restrict junk food advertising aimed at children, ban high-caffeine energy drinks for under-16s, and give local councils greater authority to block fast-food outlets near schools. The plan also introduces mandatory healthy food sales reporting for large companies by the end of the parliamentary term. Central to the reforms is an update of the Nutrient Profile Model, first developed in 2004, which underpins restrictions on high fat, salt and sugar (HFSS) product promotions.

Scotland has launched its Population Health Framework 2025–2035 alongside the National Good Food Nation Plan. Early measures focus on preventative action, including reformulating foods to reduce fat, sugar, and salt content, supporting healthy school meals, and working with retailers to improve consumer shopping baskets.

Both nations are advancing restrictions on HFSS promotions. England’s Food (Promotion and Placement) Regulations 2021 already limit multi-buy deals and product placement in stores and online, while new advertising regulations taking effect from January 2026 will ban TV adverts for unhealthy foods before 9pm and restrict paid-for online promotion. Scotland is preparing similar rules after a 2024 consultation. Local authorities will be tasked with enforcement, reflecting efforts to curb obesity-related illnesses, which remain among the leading causes of preventable disease.

Mandatory calorie labelling is already in force for large food outlets in England, and Scottish policymakers are weighing comparable measures. Advocates argue calorie data empowers consumers, though campaigners caution against unintended effects for vulnerable groups, including those with eating disorders.

Regulation is also widening to cover emerging risks. Ultra-processed foods (UPFs), which account for an estimated 57% of the UK diet, are under growing scrutiny following research linking high consumption to obesity and cardiovascular disease. While no UK laws specifically regulate UPFs, the Scientific Advisory Committee on Nutrition’s April 2025 review acknowledged mounting evidence of harm and recommended further research to determine causality.

Food colourings are another area under review. The UK has required warning labels on certain artificial dyes since 2010, leading many producers to switch to natural alternatives. Meanwhile, the US Food and Drug Administration has banned Red Dye No.3 from 2027 after studies suggested a cancer risk. Although the dye is not widely used in the UK, the move is expected to accelerate reformulation for products sold across both markets.

Concerns over the nutritional quality of baby foods have prompted the UK government to issue voluntary guidelines for manufacturers, targeting reductions in sugar and salt without the use of sweeteners. Companies have until February 2027 to meet these targets, after which mandatory measures may follow.

Taken together, these measures mark a clear policy shift toward a health-focused food environment. For food and drink businesses, the implications are significant: tighter advertising and placement rules, greater labelling obligations, and mounting pressure to reformulate. Industry observers note that beyond compliance, companies will need to align more closely with public health priorities and consumer expectations.

The direction of travel is clear. As policymakers in England and Scotland implement these frameworks, the UK food sector faces a decade defined by stricter health standards, greater transparency, and growing scrutiny of the links between diet and disease.

Source: CMS

Dubai Investments and Angola’s Sovereign Wealth Fund Partner on Luanda Real Estate Development

Dubai Investments has signed a partnership with Angola’s Sovereign Wealth Fund (FSDEA) to jointly develop large-scale real estate projects in Luanda Province, beginning with Cazanga Island in the Luanda Archipelago. The agreement was formalized in Luanda by Dubai Investments Chairman and CEO Khalid Bin Kalban and FSDEA Chairman Armando Manuel, with Angola’s Secretary of State for Urban Planning, Manuel Canguezeze, in attendance.

The collaboration is designed to support urban expansion and sustainable development in Angola’s capital, starting with mixed-use projects combining housing, tourism, and city infrastructure. FSDEA will participate through its affiliated company holding the land rights, while Dubai Investments will contribute financing and development expertise. “This agreement underscores our commitment to attract international investment and knowledge into Angola’s real estate and tourism sectors,” FSDEA Chairman Manuel said at the signing.

The Luanda project marks Dubai Investments’ second entry into the Angolan market, following DIP Angola, a mixed-use hub modeled after its flagship development in the UAE. The company has stated that real estate remains a central pillar of its growth strategy, alongside financial services. Ongoing UAE projects include Asayel Avenue at Mirdif Hills, the Danah Bay villas in Ras Al Khaimah, and Violet Tower in Jumeirah Village Circle, scheduled for completion in 2026.

The UAE and Angola have been strengthening trade and investment ties. In the first half of 2025, total trade between the two countries reached $1.4 billion, up nearly 30 percent year-on-year, according to official figures. Angola’s main exports to the UAE include diamonds, gold, copper, and grains, while the UAE exports petroleum products, steel, cigarettes, and perfumes. Other UAE firms are expanding in Angola as well: Masdar is developing a 150 MW solar power plant to supply electricity to 90,000 homes, and AD Ports Group has begun operating a multipurpose terminal at Luanda Port.

Earlier this year, the UAE and Angola signed a Comprehensive Economic Partnership Agreement (CEPA), expected to boost annual trade to more than $10 billion by 2033, add $1 billion to both economies, and create around 30,000 jobs. The Luanda development deal is seen as part of this wider effort to deepen bilateral economic cooperation and attract long-term investment into Angola’s growing urban and infrastructure sectors.

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