According to a KOF statement on Wednesday, the KOF employment indicator has stalled the growth it has seen in the past two years. The indicator fell to 14.3 in the fourth quarter of 2022 from a revised 16.0 points (previously 17.2) in the third quarter.
The indicator is still above the medium-term average. However, the decline may be the first sign that the difficult economic environment will be reflected in the employment figures.
The KOF employment indicator is calculated from KOF quarterly economic surveys, in which approximately 4,500 companies are asked about their employment plans and prospects. According to KOF, a clear majority of companies surveyed still decide that the number of employees available is too low in terms of balance. In addition, the number of companies that want to increase the number of employees in the next three months is significantly more than those that plan to lay off.
According to KOF, employment prospects clouded, particularly in banks and manufacturing. The indicator in manufacturing fell from 9.2 to 0.7 points. A small majority of companies surveyed even expect layoffs in the next three months. Banks’ employment prospects are also viewed as less positive and approach their long-term averages. In many other sectors, the indicator remains high.
In the past, the employment indicator for the manufacturing sector has been shown to be a very good predictor of actual employment development in the sector, KOF continues. Labor market developments in other sectors are generally expected.
(SDA)