Employment grows in Hungary, as momentum lasts even during the summer

The rise in employment maintained its momentum even during the summer in Hungary, buoyed by a faster-than-expected economic recovery and seasonal effects, as well. The good news is that the rise in employment is taking place mainly on the primary labour market. As you can see on the chart below, employment excluding expatriots and those in public works is already over the pre-crisis peak.

The number of people employed in public works has stabilised around 90,000, and we have not seen meaningful changes here for a while now. It was fairly clear even before the coronavirus pandemic that any further significant reduction in the number of people employed in the public work programme was hindered, as their employment on the primary labour market was made difficult by skills issues and geographical constraints.

Meanwhile, the number of Hungarians temporarily working abroad has increased over the last few months, but it remains well below the pre-Covid figures of 100,000 to 120,000. This data shows that once lockdown measures were (partly) lifted in the summer, many Hungarians went to work to Western Europe again.

Overall, the domestic labour market can be considered robust and employment is expected to rise further as the economy keeps recovering from the crisis. Over the last few months, labour shortage has re-emerged in an increasing number of sectors and the number of vacancies jumped in the business sector in the second quarter.

Labour shortage is likely to increase in the following months, affecting more and more sectors and thus forcing companies to raise wages to a greater extent.

More to follow!

Cover photo: Getty Images