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Luxembourg's job market is facing significant challenges, particularly in three key sectors, according to Statec. Adem's recent figures also highlight a rather gloomy trend.
Despite a rebound in economic activity at the start of the year, "the situation in the labour market has further deteriorated," says Statec in a recent publication.
Employment growth in Luxembourg has slowed, reaching an annual rate of only 0.8% in June - the lowest since the 2009-10 financial crisis. However, Statec notes that "a timid recovery can be hoped for in the coming quarters."
Since early 2023, employment has slowed across nearly all sectors, with only non-market services maintaining their pace. Three sectors in particular are driving the slowdown: construction, specialised scientific and technical activities, and the financial sector.
The construction crisis has notably resulted in the loss of around 3,300 jobs since October 2022, representing more than 6% of the sector's total workforce.
In specialised, scientific, and technical activities, the slowdown is primarily due to the decline in head office activities, which had been very dynamic in the past (averaging +12% growth per year since 2015) but saw employment fall by nearly 2% over the past year as of early 2024.
The financial sector's loss of momentum is largely attributed to a slowdown in fund management, which grew by 2.6% over the year to April 2024, compared to an average annual growth of 8% since 2015.
Unemployed and discouraged
Statec also notes that, given the job market's deterioration, it is surprising that the unemployment rate has not risen further since late 2023. The rate even declined slightly at the start of 2024 before rising again to 5.7% by late spring. This paradox may partly be explained by an "increase in inactivity or unemployment not reported to Adem."
Recently, "Adem observed a decrease in registrations from unemployed individuals not receiving compensation. Thus, some discouraged unemployed people seem to have gone into (apparent) inactivity, facing an expiration of rights to compensation and a lack of employment prospects”, notes Statec.
Latest figures from Adem
Adem's June 2024 report reveals that Luxembourg's unemployment rate remained unchanged from the previous month, standing at 5.7%.
The number of new job seeker registrations is decreasing, with 2,178 residents registering with Adem in June 2024, a drop of 162 people, or 6.9%, compared to June 2023. This marks the first year-on-year decrease since January 2022.
As of 30 June, 2024, the number of resident job seekers registered with Adem increased by 1,750 people (or 11.4%) compared to June 2023, totaling 17,083 individuals. The most significant increases are among highly qualified job seekers (higher education graduates) and those aged 30 to 44.
At the profession level, the largest increases in job seekers are seen in construction, installation and maintenance, transport and logistics, the financial and real estate sectors, the hotel, catering, tourism, and leisure industries, accounting, and IT.
The total number of available positions at the end of June 2024 stands at 7,586 - a year-on-year decline of 20%. This decline primarily affects accounting and management professions, IT, the financial and real estate sector, finishing trades, legal professions, and warehousing, handling, and moving professions.
Overall, Luxembourg's job market faces significant challenges, with particular pressure on the construction, scientific and technical, and financial sectors. While there is hope for a modest recovery, current trends indicate a period of adjustment and uncertainty for the labour market.
