Prague, Czech Republic – The Czech unemployment rate has slightly increased in December compared to the previous months but remains at a historically low level unseen anywhere else in Europe.
According to the Czech statistical office, the unemployment rate – which reflects the share of the unemployed in the labour force (economically active people) aged 15 to 69 years old – in the country reached 2.2% at the end of last year (slightly less than 115.000 people in absolute terms), a 0.3 percentage point increase compared to the previous month. No cause for alarm, however, as the Czech unemployment rate remains at one of its lowest levels since 1993, and has even recorded a year-on-year decrease of 0.2 percentage points compared to December 2017. Taking into account the gender, the male unemployment rate (1.8%) was slightly lower than the female one (2.6%).
The European statistical office Eurostat uses the same methodology but takes into account the general unemployment rate of people aged 15 to 74 years old. According to EU data, the Czech unemployment rate stands at 2.1%, the single lowest in the European Union by a wide margin compared, for instance, to 3.3% in Germany, 3.5% in Poland, 4% in the U.K. and 6.6% on average in the EU at the end of last year.
The Czech unemployment rate has never, since mid-2015, been over the threshold of 5%. Its all-time high was reached between 1999 and 2005, when the unemployment rate was stagnating between 8% and 9% of the total workforce.
According to Deloitte analyst David Marek, quoted by Radio Prague, “the slowdown in economic growth indicated that unemployment levels would more or less stagnate (…) until April when the number of people without work will start going down again”. According to most analyst, the slight increase is simply due to seasonal adjustment.
The Czech Republic has long been struggling with rising job vacancies and difficulties in filling open positions, cited by a majority of companies as one of the main strains on their activity and future prospects, as some businesses are unable to sustain the growth of their activity for lack of available workforce. The number of vacancies rose to more than 320.000 at the end of last year, growing by over 100.000 in one single year. This phenomenon also forces some business owners to turn to a growing amount of employment agencies, that sometimes operate at the border of legality, and to rely on foreign workers to fill the employment gap.
Although many experts are forecasting a slowdown in growth in the coming years, all signs currently highlight the astounding health of the Czech economy: GDP is growing at around 2.5%, inflation is under control (2.1%), industrial production is up by nearly 5% year-on-year, exports are booming (11% year-on-year) and the average gross wages grew by 6% yearly in real terms after the Czech minimum wage got a new year boost. The prospects rarely looked as good as they do now, including for young Czech people and university graduates arriving on the labour market and ranked the least vulnerable to poverty in the EU.