The number of job vacancies in the economy fell by almost 8,000 in the second quarter of this year, falling below 40,000 vacancies, Statistics said on Monday.

In the second quarter of 2023, the highest vacancy rate was recorded in financial intermediation and insurance and in energy production and supply.

The budget sector accounted for a fifth of the total number of vacancies.

Thus, 3,700 vacancies were found in the state administration, 2,800 in the field of health care and social assistance, and 1,100 in education.

The largest increase in the vacancy rate was observed in financial intermediation and insurance (+0.59 p.p.), followed by real estate operations (+0.38 p.p.) and production and supply of electricity and thermal energy, gas, hot water and air conditioning. (+0.33 percentage points).

Why is this important to you?

Vacancies are an indicator of labor market tightness, which is important in determining wages.

The decrease in the number of vacancies confirms the decrease in tension in the labor market, favoring the Central Bank from the side of inflation; inflationary expectations have a dominant contribution to wage growth.

A number of high wage increases caused by permanent features of the labor market are also not excluded: negative natural growth, the process of cross-border mobility with a negative balance, a high share of the inactive population, and an acute shortage of appropriate skilled labor in some sectors.

If excess demand in the economy remains high for longer, the increase in labor costs can be partially absorbed a decrease in the profitability of companies and partly a new increase in final prices for consumers. These potential inflationary effects will directly affect the purchasing power of the population, and in this case the causal chain of high prices – low real wages – demand for wages can generate a self-sustaining inflationary spiral, points out National Bank.

The annual dynamics of average accrued wages in the economy in April-May 2023 increased slightly – up to 13.6%, growth rates were influenced by events in the private sector.

In the budgetary sphere, the annual growth rate of wages was more moderate, namely 7.4% in April-May, but increased by 1.8 percentage points. compared to the first quarter of 2023 due to the distribution of vouchers.

The vacancy rate and the percentage of companies that perceive labor shortages as a limiting factor are markedly lower than the highs recorded during the expansion period of 2007-2008, but close to the values ​​recorded in the fourth quarter of 2019. The developments, together with companies’ optimism about employment in the DG ECFIN survey, indicate solid demand for jobs in the economy.

The dynamics of labor productivity in the economy decreased in the 1st quarter of 2023 to 3.6 percent. The construction sector made a decisive contribution (slowing annual VAT rate from 16.1 percent to 7.5 percent) against the background of moderate activity in the housing sector, while productivity in trade, transport and HoReCa reinforced the positive. annual dynamics, as a result of the further expansion of modern retail networks.

The manufacturing industry is still showing no signs of recovery. In this segment, labor productivity also declined in the first quarter of 2023 at a rate similar to that recorded in the previous interval, i.e. by -3.3%, subsequently deteriorating to -6.8% in the first two months of the second quarter.