Business Czech unemployment figures shoot through 600,000 mark to new record

10-02-2014 14:00 | Chris Johnstone

Relief from the Czech Republic’s record jobless total could come as soon as next month, though a sharp decline is not expected until seasonal work starts to kick-in during the summer. But some economists see unemployment rates climbing again to near 2013 levels by the end of the year.

Photo: Mohammed Shaker / Stock.XCHNGPhoto: Mohammed Shaker / Stock.XCHNG Czech unemployment pushed through the psychological 600,000 mark for the first time in the country’s recent history to set a new record in January, according to the Ministry of Labour and Social Affairs.

The jobless figure climbed by just over 32,000 compared with December to reach the total of 629,274. The absolute numbers are slightly higher than most predictions and translate into 8.6 percent of the working population seeking jobs against the previous month’s 8.2 percent.

Seasonal factors are blamed for some of the rise, together with the fact that many company lay-offs are timed to take place at the end of the year. Analysts say that the main message from the latest figures is that although the recession has finished, that fact has still to spark corporate recruitment. Firms faced with increased orders are meeting demand through overtime or other ad hoc measures rather than taking on new staff. The jobless total will only start to fall when the economic upturn gains pace and there is no slack left to meet extra demand.

The number of vacancies gives a glimmer of hope that that phenomenon might be starting to take place, though it is not very conclusive. Vacancies rose in January by 1,216 to total 36,394 with an average of 17.3 people chasing every job. In the worst Czech vacancies black spot, Jeseník, that ratio is around five times worse with just over 85 people for every vacancy.

The unemployment map shows sharp regional differences ranging from the low 3.6 percent of |Prague’s eastern suburbs to the highest 15.2 percent of Bruntál which borders Poland. Many of the worst hit localities are witness to structural weaknesses such as over reliance on already dead or declining industries, such as coal mining, textiles, and chemicals with their peripheral location and poor transport connections doing little to attract new employers. Probably the worst cluster of joblessness is around Most, Chomutov, and Litvínov with the Ústí region as a whole having the worst unemployment rate at 11.9 percent.

Some economists see the jobless rate beginning to fall again in February, with others saying a sharper drop is unlikely to take place until the summer when the unemployment rate could drop to around 7.6 percent. Komerční Banka is one of several institutions seeing the unemployment rate picking up at the end of the year to end up at around 8.2 percent.

On the other side of the jobs equation, the Czech Republic is witnessing ever higher proportions of the working age population in employment. The percentage rose to 68.3% in the last quarter of 2013, an increase of 1.2% on the same period at the end of 2012, according to the Czech Statistics Office. That percentage in employment is the highest rate since the first quarter of 1998. Some of the increase is accounted for by more short time working and the increasing preponderance of limited duration employment contacts.

Statistics office figures, drawn up according to criteria used by the International Labour Office and Eurostat, for unemployment at the end of December stood at 6.8 percent, a fall of 0.4 percentage point compared with the last quarter of 2012. Just under half of that total was made up of the long term unemployed.

The stark difference between the Statistics Office’s and ministry’s unemployment figures stems partly from the fact that the latter is the total of registered unemployed passed on by local labour offices. Some of those registered might be regarded as employed under the office’s different criteria or might not be immediately available to work for various reasons and therefore not counted as actively seeking work.

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