'There may be a strong decline in employment': BIEC

The Labor Market Index (WRP) – informing in advance about future changes in the level of unemployment did not change in February this year, the Bureau of Investments and Economic Cycles (BIEC) reported. Analysts indicate that in recent months the indicator shows increased volatility, and pandemic restrictions may contribute to a significant correction in the size of employment.

"The Labor Market Index (WRP) informing in advance about future changes in the level of unemployment in February this year has not changed its value compared to last month. Since last autumn it has shown increased volatility in the following months. On the one hand, protective measures encourage storage workers, on the other hand, uncertainty and weaker economic activity would dictate redundancies. However, employers still have in mind the notorious problems with finding a suitable workforce. The prolonged period of applicable restrictions and the simultaneous increase in the costs of running a business may eventually contribute to a significant correction in employment, especially since the comparison of data from the labor market with information on the number of insured persons may indicate an increase in the shadow economy in the economy," the report reads.

Adjusted for seasonal factors, the registered unemployment rate stood at 6.1 percent in January, BIEC reported.

The reduction of employment will be affected not only by the course of the pandemic and the related restrictions on economic activity but also a significant increase in operating costs resulting from the higher energy prices in force from the new year and the increase in the minimum wages.

(ISBnews)