Monday, 21 April 2014

Labour market increasingly troubled owing to recession, analysts say

11 December 2012

Prague, Dec 10 (CTK) - The number of unemployed people in the Czech Republic is being increasingly influenced by the economic recession when companies are not offering new jobs, but are beginning to reduce their number, analysts have told CTK in a poll.

The number of jobless people will continue to increase in the months to come, analysts said.

The unemployment rate is now the highest since January last year, disregarding seasonal influences.

Unemployment in the Czech Republic grew to 8.7 percent in November from 8.5 percent in October. The share of the unemployed on the population is 6.8 percent, according to a new indicator.

The number of the unemployed exceeded half a million.

The economic recession forces companies to gradually reassess the number of their employees, Petr Dufek, an analyst at company CSOB, said.

The most extensive lay-offs, like in a segment in deep depression, is registered by the construction industry. But industrial companies are also beginning to reduce staff numbers, Dufek said.

However, the falling economy does not offer new opportunities, and new jobs are not being created as a result, he added.

Overall, the situation on the labour market worsened in November because the number of job seekers rose by 2.4 percent, while the number of vacancies fell by 4.7 percent, Raiffeisenbank analyst Vaclav France said.

Unemployment will probably further increase because the end of the recession in the Czech economy is nowhere in sight, said Michal Kozub, an analyst at company Home Credit.

The likelihood that the unemployment rate will break the 9 percent level still this year in December is growing very markedly, Kozub said.

"The average unemployment rate will probably reach 8.6 percent this year, and next year it will grow to 9.1 percent. A change for the better on the labour market is not most likely to happen earlier than in 2014," Patria Finance analyst David Marek said.

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