23.05.2022
IN WHICH SECTORS ARE MOST SOUGHT AFTER WORKERS
The war in Ukraine and the ensuing economic shock threaten to wipe out much of the recovery and growth since the pandemic. Despite the deteriorating working conditions of a number of companies - mostly those dependent on conflict-prone energy supplies - at this stage there are no particular indications of serious labor market problems, according to an analysis by the Institute for Market Economics.
Data published this week by the NSI Labor Force Survey for the first quarter show a slight decline in the total number of employees compared to the previous - from 3080 thousand to 3068 thousand people for the age group of 15 years and older. Due to the shrinking population, however, the employment rate improved by 0.1 percentage points. However, as the winter months are usually the "bottom" of employment in Bulgaria, it is difficult to directly attribute this decline to the new economic shock, especially given that compared to the first quarter of 2021 there is an increase in total employment by 40 thousand people. We must also take into account the fact that in the first quarter of 2022 there are only 5 weeks of the military conflict, which continues to this day, and therefore we can expect a more serious impact from it in the second quarter, where the overall economic dynamics is driven mostly by the aftermath of the war, according to the IME.
At the district level, the dynamics are mixed. Most districts registered an improvement compared to the same quarter of 2021, but there are also significant declines, most visible in Kyustendil, Sliven and Smolyan. Almost all regions where no improvement has been reported are among those that have suffered a more severe blow to the local economy during the Covid-19 crisis, and their continuing problems are a sign of more persistent structural problems with supply and quality. labor force and labor demand. At the same time, the highest growth is observed in less economically developed areas, where there is still a free labor force.
The decline in employment in Plovdiv is also impressive - by more than 3 points compared to the fourth quarter of 2021, although the regional labor market remained relatively unaffected during the previous crisis. It is also important to note that 12 districts have already exceeded the values of the employment rate from the first quarter of the record for the labor market 2019, most visible in Varna (by 8.3 percentage points) and Kardzhali (by 4, 6 pp). However, this does not necessarily mean a large increase in the number of jobs due to the large decline in population over the past two years, the analysis said.
According to economists, the distribution of employment by economic activity clearly demonstrates the reorganization of the economy as a result of the crisis and the contraction in tourism and international travel. It is in the hotel and restaurant sector that the largest decline in the number of employees is observed - by 28% compared to the first quarter of 2019 or over 40 thousand people. At the same time, the positive dynamics and the high demand in construction determine the growth of employment both in the sector itself and the approximate doubling of the number of employees in real estate operations.
There is a strong positive dynamics both in professional activities (including part of the outsourcing of business services) and in ICT. In other words, despite the large shortage of staff - defined as the mismatch between the declared demand from companies and the number of graduates in these vocational colleges, the digital business continues to add new employment, at a relatively rapid pace - within a year in the ICT sector have grown by 23% to 124 thousand people.
A look at the shorter-term effects of the war and the deteriorating economic climate can be found in the monthly unemployment data from labor offices. At this stage, however, there are no indications of deterioration, on the contrary - in April 2022 the number of registered unemployed decreased by over 5 thousand people compared to March, which leads to a decrease in the unemployment rate by 0.2 points to 4 .6%. The contraction of unemployment in the last month has been observed in all districts of the country, except in Sofia (district), where the increase is insignificant.
In summary, the latest available data point to the limited impact of the 'new crisis' on the labor market. However, this does not mean that if the military conflict in Ukraine - and thus its impact on energy prices and supplies and overall economic dynamics - continues, the affected companies will not be forced to lay off workers and reduce employment, the IME concluded.
