Latviski English По-русски
Sunday 18.03.2018 | Name days: Ilona, Adelīna

Economists: lack of workforce increases pressure on salary level

(No Ratings Yet)

Even in the coming months and next year, workforce availability in Latvia will continue to decrease; though not as rapidly to slim down departure queues from the state. At the same time, the lack of specialists will motivate entrepreneurs to think about raising salaries, economists of Latvian banks comment the latest employment data.

Bank of Latvia Economist Oleg Krasnopyorov:

The latest data of the Central Statistical Bureau of Latvia states that there is no reason for concern in regard to unemployment rates becoming higher. The proportion of job seekers in Q3 of 2012 was 13.5% of the total number of economically active residents, which is the lowest index since the end of 2008. The recovery of the job market, which has been going continuously since 2010, will be reflected not only in the increase of employment, but also in the reduction of unemployment.

It is expected that the reduction of unemployment will continue in 2013, but it will not be more rapid that this year’s. On the one hand, the rapid GDP growth will contribute to the recovery of the job market. On the other hand, the dynamics of the reduction of unemployment will be affected by the success of combating structural unemployment. More and more employers complain about the lack of qualified workforce: according to the latest data of the European Commission (EC) regarding the lack of workforce, this is mentioned by 12.3% of construction businessmen as the main factor that holds back the industry (8.7% in manufacturing, 7.1% in servicing). The level of unemployment among holders of general education is much higher than that among holders of higher education (25.1% and 6.9% respectively) and is the main reason for the “problem of unemployment” among young people.

According to the unemployment indexes, Latvia is on the 6th place in the EU behind Spain, Greece, Ireland, Portugal and Slovakia.

SEB Banka Economist Dainis Gaspuitis:

It was expected that, compared with Q1 and Q2, Q3 will show a more rapid reduction of unemployment. Economic development rates increased during Q4, but the demand of export industries for employees strengthens service industries. Of course, the seasonal jobs factor played a large role in all this.

What is important is the fact that employment has also increased – reaching 57.5%. However, it is still low when compared to other EU countries. The situation on the job market is slowly changing. Growth ensures demand for workforce, which, in turn, increases pressure on the level of wages. Even though growth shows a quite rapid rate, the unequal regional division cannot be ignored as it is reflected in unemployment statistics. Therefore, there will be a great challenge in improving workforce mobility within Latvia, as well as regional development. We will see the reduction in the number of job seekers in Q4; though it will be at a slower pace. Unfortunately, it should be concluded that the situation on the job market will not recover as rapidly as it is needed to reduce the proportion of people leaving the country.

Swedbank Senior Economist Lija Strasuna:

Excluding the effect of the State Employment Agency (SEA), the number of employed people has increased by 5.6%, compared to last year’s Q3. This means 48 thousand more employed people than last year.

Even though the reduction of job seekers in Q3 was expected, results turned out to be somewhat better than predicted.

It is predicted that the situation on the job market will continue to improve in the coming quarters, though slower than it was in Q3. Surveys show companies are still very careful both with increasing the number of employees and with increasing wages.


Leave a reply

BNN summary of the week: oligarch talks’ ownership; scandals in Lithuania; Estonia wants direct democracy

BNN offers a summary of this week’s topical news in a variety of categories: Progress; Scandals; Invitation; Fight; Opinion; Decline.

Remembrance day of Latvian Legionnaires passes with shouts and two arrests

The Legionnaires’ remembrance procession in Riga on Friday, 16 March, passed peacefully. Nevertheless, several conflicts did take place among differently-minded people near the Freedom Monument. Two individuals were arrested by police.

Influenza intensity in Latvia – moderate when compared to other European nations

A comparison of influenza activity in Europe shows that it is high or very high in several countries. Latvia’s influenza intensity is considered moderate, as noted by epidemiologist Raina Nikiforova.

Hourly labour costs in Latvia grew 7.3% in 2017

Compared to Q4 2016, in Q4 2017 hourly labour costs rose by 54 cents or 7.3 %, reaching EUR 8.02. Seasonally adjusted data show identical changes – rise of 7.3 %.

Rietumu Banka claims it has not worked with high-risk clients for years

Rietumu Banka has been steadily rejecting high-risk clients for years and has significantly reduced the volume of transactions, as mentioned by the bank’s representatives.

Lithuanian and Estonian businessmen are ahead of Latvia in terms of investments

In Latvia, 36% of small and medium-sized companies have plans to invest in the development of their business this year. In Estonia and Lithuania, on the other hand, the proportion of businesses with development plans is 42% and 46%, respectively, according to results of a recent study performed by SEB Bank.

Russia pledges maximum pressure on UK amid ex-spy poisoning row

Russian top diplomat in the UK has envisaged on Friday, March 16, that the Kremlin would use maximum pressure on London as Moscow insists it has not been involved in the poisoning of a former Russian-British double agent with a Russian-made chemical weapon, as has been found by British investigators.

Latvia’s ministry: Crimea’s annexation is illegal

18 March 2018 will mark four years since the Russian Federation violated Ukraine’s sovereignty and territorial integrity by annexing the Crimean Peninsula and causing military aggression in the country’s eastern region. With its actions the Russian Federation has violated international law and basic principles of international relation, says Latvia’s Foreign Affairs Ministry.

Building gas pipe to Finland, Estonia to organise works for EUR 135 million

Continuing the works on the Balticconnector gas pipeline between Estonia and Finland, the Estonian natural gas network company Elering has stated that around 135 million euros, including a 98-million-euro funding from the European Union, will be invested in the project.

Replacement of cash registers rejected by SRS would cost half a million euros

The State Revenue Service has declined 18,000 cash registers as unfitting for requirements established by the Cabinet of Ministers. Fixing the problems found in them would cost half a million euros, as reported by LNT News.

Latvian Anti-Nazi Committee presented with protest restrictions on 16 March

Administrative District Court has compiled a shortened ruling, in which it rejected Latvian Anti-Nazi Committee’s application and preserved the decision imposed by Riga City acting CEO on 13 March 2018 on establishing restrictions on the planned gathering and protest act for 16 March unchanged.

U.S. introduces Russian sanctions for election meddling and cyber-attacks

Washington has introduced sanctions against 19 Russian individuals and five entities blaming them for attempts to sway the 2016 U.S. election and perceived cyber-attacks.

Slovakian PM Fico replaced with fellow party member

Slovakian head of government Robert Fico has stepped down after the murder of a journalist shed light on corruption in Slovakia, prompting nationwide protests. The long-standing Prime Minister had offered to resign earlier this week if the ruling coalition was allowed to finish its term.

Weekends will be cold and sunny in Latvia; next week will have volatile weather

Starting with Sunday, 18 March, air temperature in Latvia will rise above zero in most of the country, as reported by State Environment, Geology and Meteorology Centre.

Lithuania’s ruling LFGU party remains unscathed by scandals

It seems that, for now, Lithuania‘s ruling Farmers and Green Union has been nearly damage-proof despite the lambasting.

Latvian Civic Alliance: non-government sector should aim towards cooperation

Latvian Civic Alliance has invited the management of Latvia’s Chamber of Commerce and Industry to meet to discuss ongoing cooperation between organizations representing the business sector and the NGO sector.

Saeima rejects National Alliance’s proposal to make 16 March an official remembrance day

Latvia’s Saeima has decided to reject the proposal submitted by the National Alliance on making 16 March an official remembrance day.

43.6% of Latvian households have difficulties with making ends meet

In 2017 the share of households admitting that pay for usual necessary expenses with difficulty or great difficulty constituted 43.6 %, which is 1.5 percentage points more than in 2016.

Saeima voices support for Rail Baltica project’s progression

On Thursday, 15 March, the Saeima made a decision to support Rail Baltica project’s progression. In its decision, the parliament invited Latvia’s Cabinet of Ministers to provide all the necessary support for the project’s successful realization to ensure the project is realized in accordance with established terms and does not lose funding or support from the European Union, as reported by Saeima’s press-service.

Fast snow shovelling linked to cardiac fatalities, Finnish study finds

In Finish doctoral study, it has been concluded that snow should be shovelled calmly, not provoking stress and increased adrenaline in human blood that could lead to cardiac arrest.

Riga’s mayor spent at least eight million euros of residents’ money to promote himself

Over the course of the past three years, at least EUR 8 million of residents’ money has been used to promote the image of the Mayor of Riga Nils Ušakovs. This money was used to buy media, employ young members of Harmony, and finance ‘in-house protestors’ and using social networks, as estimated by Re:Baltica research journalism center.

Slovenia's head of government resigns amid protests and struggling railway investment

The Slovenian head of government Miro Cerar has stepped down from office in reaction to troubles with an expensive railway project and mounting opposition by trade unions.

NAF Commander: Latvia and Estonia have joint military procurements planned

Latvia and Estonia have joint military procurements planned, Commander of Latvia’s National Armed Forces Leonīds Kalniņš told journalists after his meeting with Commander of Estonia’s Defence Forces Riho Terras.

Estonia's switch to free higher education proved right choice, says Ratas

The switch to free higher education made by Estonia in 2013 has proved to be the right choice for a small country, even though critics have pointed to potentially less motivated students, has stated the Estonian Prime Minister Jüri Ratas.

President: we will not give away our scientists’ ideas for free

It is necessary to concentrate all resources on research performed by Latvian scientists with patent potential. This will help secure returns for Latvia’s national economy, said President of Latvia Raimonds Vējonis during his meeting with rector of Riga Technical University Artūrs Zeps.

Newest comments