The Labor Market Keeps Struggling
Yavor Aleksiev, Borislav Tonchev*
In the third quarter of 2013 the number of employed people decreased slightly on an annual basis after two consecutive quarters of growth in the first half of the year. In June-August 2013 the employees are 5000 less than in the same period in 2012.
However, in most districts (16 out of 28) there is an increase in the number of the employees on an annual basis. Some of the most interesting labor market trends in the third quarter are represented below:
- Compared to the same quarter of last year, the Northwest and the South Central are the best performing regions on the labor market. In these two regions all districts record an increase in the number of the employees on an annual basis.
- In the third quarter, the employment rate in four regions of Northern Bulgaria remains below 40%. These are Vidin (38,6%), Lovech (39,1%), Razgrad (39,4%) and Silistra (38,4%).
- The largest increase of the number employed people on an annual basis is observed in Varna (10,700), Sofia (7,700) and Pazardzhik (5,600). On the other hand, the largest decline is registered in Stara Zagora (-15,700), Blagoevgrad (-9,500) and Yambol (-4,800).
- The greatest increase in percentage terms in the number of employees is in Montana (8,4%), Vidin (6,2%) and Varna (5,7%). The greatest decline is in Stara Zagora (-11,3%), Targovishte (-9,2%) and Silistra (-9,0%).
Methodology of the results: In the majority of the regions the recovery of the labor market began in 2011. We use both the number of employees and the employment rate of the population over the age of 15 in order to monitor the recovery process during the period from the first quarter of 2010 till the third quarter of 2013. The tables, that precede the analysis of each statistical region, are intended to illustrate the existence of clear trends in the dynamic of the number of employees in the local economy annually. For this purpose, the second consecutive quarter of increase in the number of employees on an annual basis is highlighted in green, and every second consecutive quarter of decline in the number of employees on an annual basis - in red.
For the first time since 2010, the Northwest region has shown a steady increase (two consecutive quarters) in the number of employees on an annual basis. In the third quarter of 2013, the number of employed people increased in all districts compared to the same period of last year. The trends remain most clearly positive in Vidin and Pleven. An important change of direction is observed in Lovech, where there is a break, be it moderate, in the trend of annual decrease in the number of employees after 10 consecutive quarters of decline. Positive trends are recorded in Montana and Vratsa, although employment rate in both districts remains among the lowest in the country.
North Central region
Gabrovo is the only district in this region, which has had a sustainable increase in the number of employees since the summer of 2012. The district is also a leader with 49,6% employment rate during the third quarter of 2013. This sustainable growth in the number of the employees does not apply for the other four districts. Razgrad and Silistra remain two of the four districts in the whole country with an employment rate lower than 40%. In two of the last three quarters, the number of employees in Ruse falls below 90,000 compared to 105,000 in 2010.
For a third consecutive quarter, the employment rate in the Northeast region is increasing, mainly due to the significant increase in the number of employees during the summer months in Varna. For the first time since the summer of 2010, the number of employees in the largest district in the region approaches 200,000 people. Fairly stable is the labor market in Dobrich, which registers the highest employment rate in the region in the last two quarters due to the growing seasonal trends in the local labor market over the past three years. Since the beginning of 2012, Targovishte can’t escape from the cycle of steadily declining number of employees annually. Thus, the employment rate of that district is the lowest in the last quarter compared to the others in the region - only 41.1%.
The employment rate in the Southwest region has been steadily declining for three consecutive quarters. Sofia City district and Sofia district are the two districts that are exceptions to the region for the third quarter of 2013. However, they fail to offset the decline in the others, although 75% of employees across the region work in them. Only in the capital there is a steady growth in employment rate and it remains the highest (56.5%) in the country. The sharpest decline in the number of employees is in Blagoevgrad - 6.3% on annually basis.
South Central region
The number of employees in all districts of the South Central region has increased on an annual basis for the third consecutive quarter. In the third quarter of 2013, the number of employed people in this region exceeded 600,000 for the first time since the summer of 2010. Compared to the same period last year, the most remarkable growth in employment is recorded in Pazardjik and Haskovo. Although the employment rate in both districts remains below the average for the region, persistent trends in the labor market are of paramount importance, because over 35% of the employees in the whole region work there. The good data for Pazardzhik means that employment rate has reached its bottom at the end of last year, while the average index for 2013 will report values above 40%. The sustained job growth in Plovdiv and Smolyan last year, and the traditionally strong last quarters of the year in these districts, give reasons for further increase in employment rate at the end of the year.
There is a minimal decline in the number of employees in Burgas in the third quarter of 2013 on an annual basis, after five consecutive quarters of growth. At the same time the strong first two quarters of the year and the increasing resilience of the labor market in the winter months’ trend in recent years make reaching the highest levels of average employment in the region since 2008 a viable expectation.
The collapse of employment in Stara Zagora is surprising with regard to the good 2012 for the whole region, but is understandable against the background of lay-offs taken in a number of businesses in the district this year. Since the last quarter of 2012, the employed people in the district have been at least 10,000 less than during the same quarters of the previous year. The incurred and the expected cuts in healthcare and energy systems as well as the conclusion of construction activities surrounding “Trakia” highway had a negative impact on employment across the region.
Only Sliven district manages to maintain its employment growth, which began in the previous quarter, while Yambol struggles.
*Borislav Tonchev is an intern at IME