Economic activity of the population - 2. quarter of 2008

Employment in the primary sector (agriculture, forestry, fishing) decreased by 15.8 thousand year-on-year to 164.7 thousand persons and made up only 3.3% of the total number of first (main) jobholders. On the other hand, the number of persons employed in the secondary sector (industry, construction) substantially increased by 63.0 thousand to 2 031.0 thousand (40.6% of total employment). Total increase in this sector considerably exceeded employment increase in the entire tertiary sector (42.8 thousand). This growth was mainly affected by a year-on-year increase of 37.1 thousand in employment that occurred in ‘manufacturing’. The number of employed persons went up most in ‘manufacture of other general purpose machinery’ (+10.7 thousand), ‘manufacture of basic iron and steel and of ferro-alloys’ (+7.3 thousand), ‘manufacture of electrical equipment n.e.c.’ (+5.5 thousand) and ‘manufacture of motor vehicles’ (+5.4 thousand). The employment increase in construction (+21.4 thousand) was most marked in ‘building of complete constructions or parts thereof; civil engineering‘ (+11.8 thousand) and ‘building installation’ (+6.9 thousand). ¹

Employment in the tertiary sector (all divisions of services including transport) increased by 42.8 thousand to 2 807.3 thousand (56.1% of total employment), but the numbers of the employed in individual divisions developed in a various way. Employment increased most in ‘wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods’ (+30.4 thousand), ‘financial intermediation’ (+17.6 thousand), ‘real estate; renting and business activities’ (+14.8 thousand) and ‘transport, storage and communication’ (+10.2 thousand).
The highest increase in the section ‘wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods’ was recorded in ‘wholesale of non-agricultural intermediate products, waste and scrap’ (+8.1 thousand), ‘other wholesale‘ (+5.4 thousand) and ‘retail sale of food, beverages and tobacco in specialized stores’ (+4.3 thousand). Employment in ‘financial intermediation’ grew the most in ‘monetary intermediation’ (+12.2 thousand). In the section ‘real estate; renting and business activities’ the growth was especially in the group ‘miscellaneous business activities n.e.c.’ (+4.5 thousand). Employment in the section ‘transport, storage and communication’ grew especially in ‘telecommunications’ (+5.1 thousand) and ’activities of other transport agencies’ (+4.3 thousand).
On the other hand, employment dropped most year-on-year in the section ‘health and social work’ (-15.1 thousand), especially due to a decrease in the number of the employed in ‘human health activities (-21.7 thousand). Total drop of employment in ‘education’ by 13.6 thousand was most felt in ’secondary education’ (-11.5 thousand) and ’pre-school and basic education’ (-8.9 thousand).
When interpreting the data, it is necessary to take into consideration that the discrepancies against the business statistics result among other things from the fact that the concept of employees in the LFSS is more general and is not directly related to registered number of employed persons.

An increase in the total number of self-employed including family workers by 14.1 thousand was apparent mainly in the sections ‘construction’ (+15.5 thousand) and ‘wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods’ (+8.7 thousand). In ‘construction’, the highest year-on-year increase in the number of self-employed persons was in ‘building of complete constructions or parts thereof; civil engineering‘ (+6.8 thousand) and in ‘building installation’ (+5.2 thousand). These self-employed are mainly own-account workers, i.e. self-employed persons without employees. In ‘wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods’, the highest increase was in ‘other wholesale’.

The total employment rate among persons aged 15-64 grew by 0.6 percentage points year-on-year to 66.6%. The relative increase was higher in the employment of men at working age (+0.8 percentage points to 75.3%); female employment was 0.3 percentage points up and reached 57.8%. The employment rate is pushed down by a rapid growth of the number of university students on the one hand, on the other the number of persons in employment is increasing due to the concurrence of employment in the strong birth cohorts from around 1950 and the mid-1970’s and rising retirement age.

Concrete aims for the employment rate in the EU countries until 2010 were determined in the meetings of the European Council in Lisbon in 2000 and Stockholm in 2001. The total employment rate should reach at least 70%, female employment rate at least 60% and elderly employment rate (age group 55-64) at least 50%.

Compared internationally, the Czech Republic is among the countries with above-the-average employment intensity in the EU. According to the latest complete data for Q4 2007 released by Eurostat, the employment rate of persons aged 15-64 in the Czech Republic was higher than the total for the EU27 and for the first time rose above the rate in the EU15. However, female employment rate in the Czech Republic is lower than in the EU15 and below the EU27 average.
Differences in employment rates between EU countries are considerable, not only if we compare the whole age group 15-64, but also in the male and female components of employment. On the one hand there is a high employment rate in the northern countries and the United Kingdom (e.g. in Denmark it was 77.4% in Q4 2007), on the other hand employment rate in some countries was below 60% (in Hungary 57.1% in Q4 2007). Compared to our neighbour countries, higher employment rates are in Austria and Germany and significantly lower in Poland and Slovakia.
Even bigger differences are in the employment rate of persons aged 55-64. In Malta, Poland, Luxembourg, Slovenia, Italy and Hungary it oscillated around 30%. A significant number of member states will thus have difficulty fulfilling the Lisbon strategy. Twelve member countries already exceeded the required 50% rate; among them are all the northern and Baltic countries.
Reaching at least 50% employment rate among people aged 55-64 will be complicated for the Czech Republic owing to a lower female employment rate. The employment rate of women aged 55-64 is still below the EU15 as well as EU27 average. It is, however, assumable that in the following years this rate will rise especially as a consequence of adjusting the retirement age. This is confirmed by the rapid increase in the female employment rate in the age group 55-64 in the Czech Republic by two percentage points in the last year.

Typical for the Czech economy is the high percentage of employment in the secondary sector (industry + construction) employment. This percentage is the highest among all of the EU27 countries and only Slovakia is close to the Czech Republic. The same holds for ‘manufacturing’ where employment reached 29.0% of total employment in the Czech Republic in Q4 2007. In the Czech Republic the percentage in ‘manufacturing’ was by nearly 11 points higher than the EU27 average and by 12 points higher than the EU15 average. On the other hand, the Czech Republic’s structure of employment by NACE activity is distinguished by a significantly lower percentage in services than in the EU15 (-14.5 p.p.) and in the EU27 as well (-11 p.p.). Below-the average percentages in the Czech Republic are recorded especially in the sections ‘health and social work’ and ‘real estate, renting and business activities’.

In terms of NACE classification, the differences between EU member states are extraordinarily high. In the Czech Republic, for example, employment in ‘manufacturing’ is four times higher in comparison to employment in ‘health and social work’, but the situation in many countries, especially the northern ones, is quite different. In four countries, ‘health and social work’ employed more people than ‘manufacturing’ (Sweden, Denmark, the Netherlands and Luxembourg).

The Czech Republic is among the countries with the highest share of the self-employed in total employment. In Q4 2007 the percentage of employers and own-account workers (without family workers) reached 15.5% of all first (main) jobholders, while in the EU27 it was 14.9% and in the EU15 14.5%. Higher percentages were observed only in five Mediterranean countries including Portugal, in which individual business in agriculture and tourism-related activities (retail trade, real estate and renting) plays an important role, and in Ireland. The highest percentages of the self-employed in the long term are recorded in Romania and Poland, as a result of especially high percentages of the self-employed in agriculture.
In terms of the share of the business sector in employment by sector and CZ-NACE activity, the following features are characteristic for the Czech Republic:
– the lowest percentage of the self-employed in the primary sector, together with Slovakia
– the second highest (after the UK) percentage of the self-employed in construction, especially of own-account workers, in the EU
– by far the highest share of the self-employed in total employment in financial intermediation
– the third highest percentage of the self-employed in the section ‘real estate, renting and business activities’
– one of the highest shares of the self-employed in employment in the section ‘other community, social and personal service activities

It is worth mentioning that, under a high share of the self-employed in employment in a number of service activities, there is still below-the-average total employment in the tertiary sector.

The regional employment in the Czech Republic increased year-on-year in all the regions, except for the Liberecký and Karlovarský Region; the highest increases were recorded in the Středočeský, Hl. m. Praha, and Moravskoslezský Region. Marked increases were observed also in the Plzeňský and Ústecký Region.

There were 95.0% of persons working full time in their main job in the civil sector of the national economy. In total 248.1 thousand persons worked part-time in their main job, most of them were women (185.1 thousand).
The share of persons working full time in their main job is in the Czech Republic the fourth highest among EU27 member states. The proportion of full-time jobs is higher in Slovakia, Hungary and Bulgaria, but the total employment rate is below the average in all of the three countries. The share of men working full time in the CR was the third highest among the EU27 countries in Q4 2007; women had the fifth highest share.

Especially women appear to have an extraordinary high differentiation of the share of full-time jobs in employment in individual EU countries. In many countries of the EU15 high numbers of women use the opportunity to work part time, particularly in the Netherlands (3/4 of working women aged 15-64 years!) and in the other five countries their share came close or exceeded 40% of the total female employment. The opportunity to work part time is one of the social aspects, which in the long term affects the fertility rate and the length of active working life in particular in the Netherlands and in some of the other countries. The Netherlands is one of the few countries where the percentage of part-time jobs grew year-on-year, whereas in most of the other EU countries a shift towards full-time jobs is apparent

The average number of hours actually worked in the reference week reached 39.7 hours, in full-time employment it was 39.9 hours. The differences in working hours of employees are large, both in terms of their professional status and CZ-NACE activity. The self-employed worked 48.4 hours a week on average, full-time employees 39.2 hours and members of producer cooperatives 38.0 hours. In the long term, these differences are apparent both for men and women when generally men work more hours in all of the professional status categories. The most hours in their main job spent employees in construction (44.7 hours), the least employees in education (35.3 hours).

With the growing total employment of the resident population and the economically inactive, the number of the unemployed decreased. The number of unemployed persons (ILO methodology) reached 220.1 thousand on average in Q2 2008, i.e. a fall of 54.5 thousand year-on-year (more than a fifth). The number of the unemployed decreased in all the five-year groups of working age, the most in the age groups 25-29 (by 11.7 thousand), 50-54 (by 9.1 thousand) and 40-44 (by 8.8 thousand). The number of unemployed men (102.2 thousand in total) is still below the number of unemployed women (117.9 thousand). Under the total year-on-year drop in unemployment, male unemployment decreased by 23.8 thousand. Over the same period, female unemployment decreased by 30.7 thousand in total.

The number of the long-term unemployed (1 year and more) fell by 37.9 thousand in total (by a fourth); this fall was relatively more rapid than the rate of total unemployment decrease.

The number of the unemployed with basic education decreased by 11.6% year-on-year to 65.8 thousand, which is connected with a general decrease in the number of Czech residents at working age with the lowest level of education. The number of unemployed persons with secondary education without maturita examination (secondary vocational school graduates in particular) decreased by 29.2% to 91.0 thousand and the number of the unemployed with secondary education with maturita examination decreased by 15.9% to 52.4 thousand. The number of unemployed university graduates rose by 17.4% to 10.8 thousand but the unemployment rate of university graduates is permanently markedly lower when compared to the three aforementioned groups.

Unemployment dropped in all of the regions of the country, most in the Ústecký Region where the unemployment rate is now below that in the Moravskoslezský Region.

The growth of total employment and the decrease in the number of the unemployed resulted in a relatively high decrease in the general unemployment rate of persons aged 15-64 (ILO). In comparison to Q2 2007, the general unemployment rate decreased by 1.1 percentage points to 4.3%. It decreased mainly among the female population (by 1.3 p.p. to 5.3%); the decrease among the male population was 0.9 percentage points to 3.5%.

According to the latest data released by Eurostat for Q4 2007, the general unemployment rate in the Czech Republic was markedly lower than in the EU27; besides the relatively low male unemployment rate, also the female unemployment rate in the CR was below the EU27 average. The big decrease of unemployment in the Czech Republic showed itself in favourable comparison with the EU27 and the EU15 alike; in Q4 2007 the unemployment rate in the CR was lower than the EU15 average by 2.0 percentage points.

In comparison to the neighbour states, the rate of unemployment in the CR is higher than in Austria but markedly lower than in Slovakia where it remains the highest across the European Union. Also Poland reports markedly higher unemployment, although it decreased considerably year-on-year. The unemployment rate in the Czech Republic is noticeably lower also in comparison with Germany, mainly due to the long term unfavourable situation in the new federal states.

In terms of international comparison, an unfavourable aspect of unemployment in the Czech Republic is persistent high percentage of the long-term unemployed. The proportion of persons out of work for one year and more in the total number of the unemployed was the sixth highest among all the EU countries in Q4 2007 (48.7% in the CR in comparison to 41.8% in the EU27 and 39.7% in the EU15). The highest proportions of the long-term unemployed were observed, besides Belgium, Bulgaria and Greece, in neighbouring Germany and especially in Slovakia where it reached over three quarters of all the unemployed.
The high percentage of long-term unemployment in the above countries represents a chronic problem relating not only the elderly unemployed; in the young and middle age group 25-49 the proportion of long-term unemployed persons was the highest in the EU.

The number of economically inactive persons aged 15+ (according to the LFSS methodology they are persons who had no job and were not seeking a job during last four weeks or did not meet all the conditions for being classified as unemployed) increased by 60.2 thousand year-on-year and reached 3 708.1 thousand in Q2 2008. This category is primarily affected by numbers of the retired and of persons in schooling or training for their future occupation. The number of basic school pupils moderately increased by 1.9 thousand to 114.6 thousand and the number of secondary school pupils including vocational school pupils decreased by 2.7 thousand to 514.6 thousand. The number of university students including higher professional school students grew markedly by 24.0 thousand to 306.5 thousand. The number of economically inactive normally retired persons not actively seeking job reached 1 926.1 thousand, the number of early retired persons 41.0 thousand and the number of disability pensioners 269.5 thousand. These figures cannot accurately correspond to the numbers of pupils and students according to the statistics of the Ministry of Education, Youth and Sports of the CR or to the numbers of pensioners on the records of the Ministry of Labour and Social Affairs of the CR because the pupils, students or pensioners who fulfilled the criterion of being classified among persons in employment or unemployed persons in the reference week are not recorded as economically inactive.

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¹ Note: When assessing the distribution of persons in employment by NACE activity, we should take into account the methodology of the LFSS which takes place in households only and not in collective accommodation establishments. The data on numbers of employed persons from the LFSS are then statistically corrected to be harmonised with data on employment of foreigners in a given NACE activity. According to available data from the Ministry of Labour and Social Affairs and the Ministry of Industry and Trade, the numbers of foreigners working in ‘manufacturing’, ‘construction’, ‘wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods’, ‘real estate, renting and business activities’ are on the rapid increase; an overwhelming majority of these foreigners do not live in households.