The situation on the Slovak labour market is deteriorating. In addition to the long-standing problem of long-term unemployment, particularly in marginalised communities, a factor the country has not experienced before is emerging: unemployment among workers with university degrees has increased significantly.
The number of unemployed people rose to more than 150,000 YoY in the second quarter. According to the Statistical Office, the unemployment rate increased to 5.6%, 0.3% higher than a year earlier.
Employment also fell, down by 13,400 people, or 0.5%. This was the fifth consecutive year-on-year decline in the number of people in work.
Long-term unemployed people, meaning those who have been out of work for more than 12 months, account for roughly two-thirds of the total. As many as 28% of unemployed people have never worked before.
Compared with last year, unemployment has also risen sharply among those who lost their jobs in the previous month. Their number is as much as three times higher than a year ago.
Maximilian Weber, a macroeconomist at Slovenska Sporitelna, says the labour market has cooled as a result of slower GDP growth, which increased by just 0.7% in the second quarter.
“Slower growth means lower demand for labour,” he says.
As he explains, Slovakia is an industrial economy and manufacturing companies are key employers. Slovak industry is also energy-intensive, so the rise in energy prices – first following Russia’s invasion of Ukraine and later after the US attack on Iran-has not helped.
According to Weber, production is also being hit by tariffs imposed by US President Donald Trump’s administration on imports from Europe into the US.
Industry accounted for the largest share of those currently unemployed who had previously been in work (19%). It was followed by trade (9%) and construction (8%).
CSOB bank analyst Marek Gabris also attributes the deterioration in the Slovak labour market to the slowing economy, as well as an unfavourable domestic business environment and geopolitical changes.
“The labour market is undergoing a process of reconfiguration. On the one hand, we are seeing a considerable number of jobs disappearing, while on the other, some jobs are being created as a result of past decisions to attract certain investments,” he explains.
A new phenomenon on the labour market is that the largest increase in unemployment has been recorded among people aged 50 to 55, with their numbers rising by as much as 50%.
The number of unemployed people aged 35 to 49 is also increasing. In both cases, these are people in their economically most productive years. (The Slovak Spectator)