Labor market continues to normalize step by step
Published: Tuesday, Nov 5th 2024, 11:40
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The number of unemployed people in Switzerland increased slightly again in October. The gradual normalization on the labour market is thus continuing.
At the end of October, 116,447 people were registered as unemployed in the regional employment centers (RAV), as reported by the State Secretariat for Economic Affairs (Seco) on Tuesday. This was 3202 more than in September. The rate nevertheless remained at 2.5 percent.
Adjusted for seasonal effects, the number of unemployed rose by 1771, leaving the adjusted rate unchanged at 2.6 percent.
The moderate increase, which began in March 2023 and was mainly due to the deteriorating international economic environment, has thus continued at a "slightly slower pace", said Boris Zürcher, Head of the Labor Directorate at Seco, in a conference call.
As is well known, the mechanical, electrical and metal industries as well as the watchmaking industry in particular have been suffering from subdued international demand for months. However, Zürcher still sees the slight increase as a "gradual normalization", which follows the very low unemployment of the post-corona boom.
On course for the 2024 forecast
For the year as a whole, the current figures are on track for the average unemployment rate of 2.4% forecast by Seco. According to the Federal Office, the normalization is likely to continue in the coming year, which should lead to a rate of 2.6%.
Even then, however, the labor market would still not be in "neutral territory", Zürcher emphasized. According to Seco's calculations, supply and demand are only in balance at a rate of 2.8%.
So even with the recent rise in unemployment, we are still more in the region of full employment. "Unemployment is still very, very low," says Zürcher.
Proof of this is also the still very low proportion of long-term unemployed and the still high level of dynamism on the labor market. "Many of the unemployed are people who are temporarily unemployed when they change jobs," said Zürcher.
Confident in the long term
Zürcher, who is now handing over the reins of the Directorate of Labor after more than ten years, is also confident about the longer-term development of unemployment. He referred to the impressive growth in employment in the recent past. "In the last ten years, 640,000 jobs have been created in Switzerland."
And Zürcher is convinced: "As long as Switzerland continues to grow, we will continue to have high job growth." This growth will come up against a shrinking demographic base in the coming years. "This will continue to shape the development of the labor market in the coming years."
According to Zürcher, advances in productivity, for example through artificial intelligence, could have certain effects. Increasing levels of female employment are also a factor. "Ultimately, however, the Swiss economy will continue to be dependent on immigration," said the departing Seco official.
He also emphasized that the fluctuations in the unemployment rate were becoming increasingly smaller. This is a consequence of the shifts in the labor market. The importance of non-cyclical sectors such as social services and healthcare has recently increased significantly. "On the other hand, we have fewer and fewer sectors that are heavily exposed to the international economy." Large parts of the economy are now "cyclically immune".
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