The increase in Czech unemployment to 4.1% in December from 3.9% in November was primarily driven by seasonal factors, according to analysts consulted by the Czech News Agency. However, they also pointed to a year-on-year rise of 0.4 percentage points in the unemployment rate, which reflects the country’s sluggish economic growth. Experts predict unemployment will remain above 4% in the coming months but stress that it will stay low compared to other European countries and will not pose a significant challenge to the Czech economy.

The December rise in unemployment is consistent with regular seasonal fluctuations, noted ČSOB analyst Dominik Rusinko. “The arrival of winter marks the end of seasonal jobs in sectors like construction and agriculture, while tradespeople who temporarily suspend their activities during the colder months also register with the Labour Office,” Rusinko explained.

Randstad ČR CEO Martin Jánský highlighted additional seasonal factors contributing to the rise. “In December, companies traditionally reduce recruitment efforts, postponing hiring until January due to the holiday period. We may also see a slight uptick in unemployment in the first quarter as part-time positions and fixed-term contracts tied to the end of the year come to an end,” Jánský said.

Beyond seasonal influences, analysts emphasized the gradual upward trend in unemployment. “The December unemployment rate of 4.1% is the highest since April 2021, indicating weak economic growth over the past two years,” said Radomír Jáč, chief economist at Generali Investments CEE. He noted that businesses in some sectors are focusing on cost control, which has likely contributed to the rise in unemployment.

Pavel Sobíšek, chief economist at UniCredit Bank, added that the 2024 annual average unemployment rate of 3.8% was the highest in seven years, with 1.24 job seekers per vacancy, a level not seen since 2017. He anticipates unemployment will continue to rise in the months ahead.

Despite the uptick in unemployment, the Czech Republic still boasts one of the lowest unemployment rates in the European Union. Andrea Linhart Palánová, an expert in human resources management, downplayed the broader economic implications. “For the Czech labor market, this development does not present a significant obstacle to faster economic growth. Skilled and qualified workers remain in high demand, and employers view them as their most valuable asset,” she said.

Palánová added that individuals willing to pursue retraining or professional development should face little difficulty in securing new employment opportunities. “The demand for quality workers will remain robust, ensuring that the current labor market trends do not pose a long-term challenge for job seekers,” she concluded.

Source: CTK

Unemployment in the Czech Republic increased to 4.1% in December, up from 3.9% in November, according to data released today by the Labour Office of the Czech Republic. A total of 306,478 people were seeking employment, representing an increase of approximately 16,000 compared to the previous month. Simultaneously, the number of job vacancies dropped by 9,000 to 246,573.

The unemployment rate in December 2023 was 3.7%, reflecting a year-on-year rise. Analysts attribute the increase to seasonal factors, a common trend at the end of the year.

The highest unemployment rates were recorded in the Ústí nad Labem Region at 6.2% and the Moravian-Silesian Region at 5.8%. In contrast, Prague maintained the lowest unemployment rate at 2.8%. Among districts, Karviná experienced the highest rate of unemployment at 8.5%, while Prague-East had the lowest, with only 1.5% of residents seeking work.

On average, there were 1.2 job seekers for each vacancy in the country. The Karviná district faced the greatest pressure on the labor market, with 11.4 applicants competing for a single position. Conversely, regions like Mladá Boleslav, Prague-East, and Prague-West had just 0.3 applicants per vacancy, reflecting better job market conditions.

The average age of unemployed individuals in December was 42.7 years, a figure that has remained relatively stable over the past five years. Job seekers were predominantly individuals with lower qualifications, including those with basic education or apprenticeships without graduation.

Employers continued to show high demand for workers in specific roles. Nearly 74% of listed vacancies required only basic or lower education, and 68% of positions were deemed suitable for foreign workers. Key roles in demand included construction workers, assemblers, forklift operators, warehouse staff, cooks, truck and tractor drivers, and cleaners.

Prague offered the highest number of job vacancies, totaling 73,744, followed by the Central Bohemian Region with 45,948 openings. However, the Labour Office noted a decline in the number of listed vacancies due to legislative changes that automatically remove job postings after six months.

While seasonal effects have contributed to the uptick in unemployment, the labor market faces ongoing challenges, including a mismatch between job seeker qualifications and employer demands. The trend of declining vacancies suggests further adjustments in the coming months as employers and job seekers adapt to shifting economic and legislative conditions.

Source: CTK