Image of labor market in February still negative: the bank

Despite the improvement in employment, the picture of the labor market in February is still negative. Firms clearly report fewer job offers than in autumn, as we read in the ING Bank Śląski comment on employment data for February published on Wednesday by the Central Statistical Office (GUS). Employment in the enterprise sector in February turned out to be 1.7 percent lower than in January last year – ING reminded and indicated that this result is in line with the bank's forecasts.

According to ING, the better result was influenced by the opening of shopping centers in early February, as stores in them could increase working hours and hire new employees.

The January revision of the size of the enterprise sector by the GUS suggests a deterioration in the condition of the smallest companies. 

"As long as the vaccination pace does not clearly increase and there is no prospect of a permanent loosening of epidemic restrictions, companies will be reluctant to increase employment and raises," ING's comment reads.

Analysts assessed the wage dynamics in the enterprise sector as disappointing. It was only 4.5 percent y/y, i.e. less than in January (4.8 percent y/y) and below expectations.

If the wage dynamics remain at a similar level in March, ING believes that in the next quarter, wage growth will accelerate to as much as 8 percent y/y.

"However, it will only be the effect of the low base from last year. The real increase in salaries will not be felt by employees until the end of the year when we start talking about a pandemic in the past due to vaccination," the ING assessed.

(PAP)