Jobs on the rise, the number of unemployed decreasing.
The situation on the labour market is still changing fast. In March 2008 the registered unemployment rate fell to 11.1% from 11.5% in February. The decrease in unemployment is attributable to fast job creation in Poland. In March 2008 the number of people employed in the commercial sector was by 5.8% higher than in March 2007; in February 2008 it was higher by 5.9% than a year before. In March wages were higher by 10.2% than a year before.
Central Statistical Office (GUS): The 1st quarter of 2008 saw the highest year-on-year increase in the number of jobs in the commercial sector since the beginning of 2005 when the downward trend in employment turned around. As a result of favourable changes in unemployment flow, in March the unemployment rate declined to the lowest level in 10 years (11.1%). The percentage of the long-term unemployed, young people and people without the right to unemployment benefits decreased while the percentage of people aged over 50 increased in the total number of registered unemployed. (“Information on the Country’s Socio-Economic Situation, GUS, April 21, 2008”)
Wages grow fast.
Central Statistical Office (GUS): In the 1st quarter of 2008 the purchasing power of average gross monthly wages in the commercial sector grew by 7.2% year on year, compared with a rise of 6.5% in the 4th quarter of last year and 5.9% a year before. The acceleration in real wages resulted from faster growth in nominal wages. Higher than average wage increases were recorded in construction, real estate services, business services and the hotel and restaurant sector. The purchasing power of pensions, both in the system for wage earners and private farmers, fell further in the 1st quarter, despite the indexation of old-age and disability pensions in March. (“Information on the Country’s Socio-Economic Situation, GUS, April 21, 2008”)
Central bank on the situation on the labour market
NBP (Monetary Policy Council): The latest data on labour market developments indicate that employment and wages are still growing fast and that wages are racing ahead of labour productivity. The upward pressure on wages is likely to persist, leading to inflationary pressure. Increased inflation in the coming months will result to a large extent from a rise in regulated prices and may also be driven by food and fuel price hikes in the global economy, a trend affecting the Polish market as well. This means the risk of high inflationary pressures and consequently the risk of second-round effects. In the medium term, inflationary pressure may be curbed by the continued favourable situation in the commercial sector and high growth in investment contributing to a rise in productivity. Inflationary pressure may also be constrained by globalisation and the related increased competition on the market of internationally traded goods and services, and by a slowdown of the global, and consequently Polish, economy. The cuts in central bank interest rates so far and the appreciation of the zloty in recent months should also contribute to keeping inflation in check. (“Report from the Monetary Policy Council Meeting on April 29 and 30, 2008”; www.nbp.pl)
PKO BP on the situation on the labour market.
PKO BP: We project that in 2008 the year-on-year increase in the number of jobs will be quite high in the national economy as a whole (a rise by around 3.2%, or some 300,000 jobs against around 280,000 jobs in 2007) and in the commercial sector (a rise by 5%, or some 260,000 jobs against 230,000 jobs in 2007). (...) We project that in 2008 households’ gross disposable incomes will rise in real terms by around 5.6%, the fastest growth in 10 years, versus around 4.8% in 2007 and 3.9% in 2006. This increase will be coupled with an improvement in the labour market situation, the indexation of old-age and disability pensions and payment of additional benefits to old-age and disability pensioners, a fast increase in wages, a reduction in the disability contribution paid by employees under the obligatory social insurance system by 2 percentage points, and the payment of means regarded as household incomes from the national and EU budget. We project that 2008 will see a rise in real incomes of all socio-occupational groups and that disparities in the rate of change in the purchasing potential among socio-occupational groups will diminish significantly compared to last year. The highest increase in incomes will be recorded in the wage earners’ group. The increase in the farmer group will be quite high due to the low statistical reference level of 2007 and other factors. As the rate of income growth will differ among socio-occupational groups, the share of incomes derived from wage employment will rise, the share of farmer incomes will stabilise and the share of incomes from pensions and self-employment will decrease. (“Macroeconomic Bulletin, PKO BP, 2nd quarter 2008”)
Gdańsk Institute for Market Economics (IBnGR) on the situation on the labour market.
IBnGR: At the end of the 1st quarter the unemployment rate stood at 11.1%, down by 0.3 percentage points compared with the end of 2007 and down by 3.2 percentage points compared with a year before. A comparison to the previous periods shows that the unemployment rate is declining at a similar rate as last year. The fall in the unemployment rate was coupled with a fast growth in average employment in the national economy. According to IBnGR estimates, in the 1st quarter employment increased by 3.9%. The increasingly acute skill shortages led to a further increase in wages. (...) In the years 2008-2009 the labour market situation will be completely different from what we were accustomed to only recently. In 2008, for the first time in 10 years, Poland should have a one-digit unemployment rate: at the end of the year it is projected to be 9.5%. And IBnGR projects that by the end of 2009 the unemployment rate will decrease to 8.2%. This sharp fall in unemployment compared to several years before is attributable to economic growth, an improved business outlook and job migration abroad. The mounting upward pressure on wages is one of the consequences of the labour market improvement. IBnGR projects that real wages will grow by 5.5% this year and by 4.0% in 2009. This growth will be lower than last year but still high. In conditions of low unemployment – one should remember that actual unemployment will be below the projected 8-9% due to informal economy – the employee bargaining power is becoming stronger than the bargaining power of employers, who will have to offer higher wages to employees to retain them. (IBnGR Report entitled “The State and Projection of Economic Conditions,” April 22, 2008; www.ibngr.edu.pl)
