Economy 29 September 2023, 9:05am

Hungarians go to work abroad in greater numbers

Portfolio

Employment growth stopped, unemployment increased slightly, while the number of Hungarians working abroad for short periods jumped to pre-Covid crisis levels - this is the summary of the employment and unemployment report of the Central Statistics Office (KSH) for the summer months.

Between June and August 2023, 4.72 million people were employed in Hungary, up 10,000 on the same period last year, but just the same as in the previous month, the KSH reported on Friday. It is striking that from July to August, the number of people employed fell by 50,000 to 4.68 million, according to Portfolio's calculations, while the stats office's calculation (adjusted by model estimation) also shows a substantial drop of 35,000 in a month.

Based on our data, which exclude Hungarians working abroad temporarily and those in public works, 4.543 million people worked in Hungary between June and August, while in the last month of the summer the office recorded just 4.5 million people in employment. The adjusted employment indicator also shows that the upward trend has stopped, with August showing a substantial decline. In this case, however, the one-month sample error may well be larger than usual, so the data for the coming months will be worth watching.

There has been no significant change in the number of those in public works, but the number of Hungarians working abroad for short periods is growing rapidly. In the summer months, their number reached 110,000, a level last seen before the Covid crisis. A year earlier, the office registered 20,000 fewer Hungarians temporarily working abroad. If we focus only on August, Portfolio estimates that their number was close to 120,000, but as the chart below shows, the 3-month average should be watched instead because of the large fluctuations.

In the June-August period, the number of unemployed increased by 34,000 to 200,000, while the unemployment rate rose by 0.7 percentage points to 4.1%. The rise in unemployment is also due to a rise in activity (more people entering the labour market seeking work), but many of them will be unemployed. According to a recent analysis by the central bank (MNB), the reason why people entering the labour market cannot find a job is because they have low skills.