Rise in unemployment predicted for 2012

Unemployment in the Czech Republic could exceed 10 percent next year in case of unfavourable economic development.  This would be 2 percentage points higher than in November, the last month for which official unemployment data from the Labour and Social Affairs Ministry have been released thus far.

 Construction, the manufacturing industry and services will rank among the sectors to be hit.

Over 400,000 people work in construction in the Czech Republic, according to Association of Building Entrepreneurs data. Construction trade unions estimate that 15,000 of them could have to leave by the end of this year and 25,000 next year. Employment in many other sectors is tied to construction as well.

 According to the most frequently mentioned, optimistic scenario, average unemployment in the Czech Republic will move around 9 percent next year but will be moderately above this level in some months. If the problems in Europe get worse, however, companies could opt for higher layoffs.

“In the manufacturing industry, some sectors, like production of computers, have already registered a significant decrease in orders,” said Confederation of Industry spokesman Milan Mostyn, adding that this should not apply to the automotive industry.

 Antonin Sipek of the the Automotive Industry Association (SAP) believes no dramatic changes can be expected in this area. “In a hypothetical case of big troubles, producers would be first dismissing people hired by agencies. The impact on regular employees would be very small," he said.