Although economic activity growth rates are declining and the outlook is becoming more challenging, labour market trends remain strong, leading to a decline in unemployment to 6.6% in the second quarter of 2022. No significant changes are expected in the third quarter, but a slight increase in unemployment is likely in the future, especially in the first quarter of next year.
Demand remains high
Sectoral surveys show continued strong demand for labour, albeit with a slight downward trend. The vacancy rate is also declining, but still high. Signals suggest that a moderate cooling in the labour market is possible. Due to sanctions and rapid cost increases.
So far, the effects of sanctions are not showing up on a large scale. There are companies that are facing the challenges of the Russian market and have started to optimize their workforce. However, next year could see clearer trends as more and more sanctions come into effect, new companies emerge and gaps in existing companies are filled.
Reason to smile
Overall, the labour market could be one of the positives in the near term, allowing the economy to adapt more flexibly to the challenges of sanctions and inflation.
Drastic changes could occur in connection with the energy crisis, but these could only be temporary in order to have a significant impact on long-term trends in the labour market.
Across Europe, there is a severe labour shortage that will only worsen. An employee is an asset that employers have to think about seven times before laying them off. Therefore, such steps are only taken in emergency situations.
