Czech unemployment held at 3% in March, but a downturn is expected

The March unemployment rate was better than expected, but analysts see an increase in the future

Raymond Johnston

Written by Raymond Johnston
Published on 09.04.2020 09:09 (updated on 09.04.2020)

The Czech labor market in March showed no significant signs of slowing down as it has elsewhere in the world. The unemployment rate remained at 3%, the same as in February and as in March 2019.

At the end of March 2020, the number of job seekers was 225,678 people, according to the Czech Labor Office. That is by 1,691 fewer than in February and 1,375 persons fewer than a year ago. It is also the lowest March value since 1997, when 199,597 people were unemployed.

Analysts expected unemployment to rise to 3.6 percent in March, but they are still cautious that the market will take a downturn in the future due to the impact of the coronavirus.

“We are concerned that it is only a matter of time before the Czech labor market, as in other countries, will show a significant deterioration. It will now be interesting to see how other labor market statistics that have a different methodology are developing. The differences could be great,” Raiffeisenbank economist Michal Brožka told news server iDnes.cz.

In March, were still significantly more vacancies than job seekers. Over 225,000 people applied for jobs at the labor offices and were able to choose from 342,287 vacancies.

Of those vacancies, 11,295 were in the framework of agreements for outside employment. A total of 79,963 job vacancies were “no flag” positions for foreigners. In a further 262,324 positions, or almost 77%, employers said they would like to hire workers from abroad.

The number of people who eventually registered with the Czech Labor Office was up 3.8% year-on-year and by 6.1%, month-on-month. Some 35,714 people applied for employment and registration.

The highest number of new arrivals were reported by the Moravian-Silesian region, at 4,666, and in Prague, at 3,218. The least number of new job seekers was registered in the Karlovy Vary region, at 1,233) and in the districts of Jindřichův Hradec (141).

“Currently, people working in the hospitality, services and tourism sectors are applying for recruitment and registration as job seekers. These areas were most affected by the epidemiological measures taken, and employers temporarily closed their operations,” Jan Karmazín, director of the employment department of the General Directorate of the Czech Labor Office, said in a press release.

“A similar situation occurs in the automotive industry and in subcontractors operating in this area. There are also those who have worked abroad in the above fields, for example, in Austria, Italy, Germany or Switzerland. And there are cross-border workers,” he added.

Among those who interrupted their activities in March due to coronavirus restrictions were self-employed persons, mostly small entrepreneurs and craftsmen.

The current situation has triggered greater demand for certain professions. Employers are currently looking for new employees in agriculture, forestry, construction, logistics, e-shops, and skilled craftsmen, drivers, analysts and software developers.

The lowest unemployment rates were reported by the districts of Prague–East (1.2%), Pelhřimov (1.5%), Rychnov nad Kněžnou, Mladá Boleslav, Prague–West (both 1.6%), and Benešov (1.7%).

A month-on-month drop in unemployment was recorded in 44 districts in March. Unemployment increased in 33 regions.

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The share of unemployed persons equal to or higher than the national average is reported by 32 regions. It was highest in the districts of Karviná (7%), Bruntál (5.7%), Jeseník (5.5%), Ostrava-City and Znojmo (both 5.3%), Chomutov (5.2%), Most (4 .9%), Louny (4.8%) and Hodonin (4.7%).

The unemployed were mostly clients with low qualifications, with basic, incomplete and secondary vocational education, with vocational certificates, or secondary education with a graduation certificates. The average age of the unemployed was 43.1 years in March.

Of the total number of job seekers, those who have been unemployed for more than 12 months totaled 20.5%. People over 50 years of age accounted for 36.5% of the total unemployment.

In March, 82,942 people received unemployment benefits, totaling 36.8% of all registered job seekers. The unemployed received on average 8,181 CZK. A year earlier, the Labor Office paid support to 82,480 job seekers.

In international comparison, according to the latest available Eurostat data, for February 2020, the Czech Republic had the lowest unemployment rate in the whole EU.