Unemployment in the Czech Republic has been falling more or less steadily since January and reached a fresh low of 5.2 percent in September, according to freshly released data from the Office of Labour. Meanwhile, the figures for those out of work (almost 380,000) and for jobs offered (just over 140,000) are the best they have been since 2008. I discussed the downward unemployment trend with Jan Bureš, chief economist at Poštovní spořitelna ČSOB.
“We see solid demand for Czech goods abroad, for exporters. We also see growing demand for services
“Therefore several sectors are looking for workers on the market, and it’s more and more difficult to find not only specific professions but also low qualified professions.
“We are approaching a level of unemployment where we can see pretty significant wage pressures, especially in regions where unemployment is already very low.”
Yes, I wanted to ask you – what does the low unemployment rate mean for Czech employers?
“It means it’s really difficult to find people already.
“If we look at in the European context, and if we look at figures that are comparable on the European level, then the unemployment is even lower – it’s under 4 percent, according to European methodology. It’s the lowest in the EU.
“So it’s tremendously difficult to find people, and this is definitely becoming one of the major obstacles to further growth.
“On the other hand, we are at the phase of the economic cycle where households can benefit from the economic developments.
“And we can see that wage growth is probably going to be even faster than in Western European countries.”
Do you expect this trend of falling unemployment to continue?
“Yes, I believe it’s going to continue. For the rest of the year we may see unemployment staying slightly below 5 percent. And it could be the same for most of next year.
“On the other hand, we probably won’t see the kind of big improvements in unemployment levels that we have seen in recent years, as in several regions the unemployment level is 1 percent or even less, and it’s really difficult to push the unemployment level lower.
“Basically there aren’t enough people who are willing or able to work.
“We are approaching the level of so-called natural unemployment, where it’s difficult for the country to get its unemployment ratios lower.”
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