Industry crisis, number of employees fell by 13.1% in 2024

2025-02-27 07:21:00, Ekonomi CNA

The number of employees decreased by 13.1% in 2024, according to data from the Ministry of Finance in the Macroeconomic and Fiscal Framework 2026-2028 (see chart below).

The Ministry of Finance's report comes at a time when INSTAT has not officially published any data on employment indicators in 2024, as official sources have explained, the 2023 census data is being integrated into the Labor Force Survey.

The decline in employment is also explained by developments in the real economy, where a series of businesses in the clothing and footwear production sector closed as a result of the negative effects on income brought about by the fall of the euro and the decrease in foreign demand.

The Ministry of Finance predicts that employment will continue to perform poorly in the medium term.

"In line with medium-term growth forecasts, employment is expected to grow by an average of about 0.1% per year during 2026-2028," the new Macroeconomic Framework states.

The higher labor force participation rate will be the main generator of labor supply growth, while negative demographic trends (observed for several years now) are expected to continue to have tightening effects on both labor supply and aggregate employment numbers over the medium term.

While the increase in labor demand is expected to reflect the dynamics of the medium-term perspective of the main sectors of economic activity, mainly in tourism and construction.

Services are expected to contribute more to the increase in labor demand compared to other sectors of the economy.

Meanwhile, employment is expected to grow at least non-negatively in the medium term (at quite moderate levels, but still positive), reflecting the opposing effects of increasing labor force participation rates on the one hand and negative demographic trends on the other.

Overall labor productivity will continue to improve during 2026-2028 and will be an important factor in generating economic growth in the medium term, the Minister of Finance analyzes.

The government expects employment to be concentrated towards sectors with higher relative productivity, reflecting technological improvements in the economy.

The labor market in our country remains problematic, with high informality and concentration in sectors that do not offer high wages. There are also high youth unemployment rates and low female participation in the labor force.

There is a growing gap between education systems and the needs of the labor market. Thousands of young people graduate every year, for whom the domestic labor market has no need, while the economy is increasingly concentrated in two sectors, tourism and construction./ Monitor Magazine