The number of unemployed people registered in labor centers grew by 4.5% in September to a total of 300,113 people, corresponding to 12,873 people more than in the same month of 2022 and 4,752 more than in August. The data comes from the Institute of Employment and Professional Training (IEFP) and shows that, in sectoral terms, the biggest contribution to this growth came from the top exporting industries, such as leather, clothing and textiles.
The 4.5% increase in September this year compared to the same month last year is the largest since the worst (most deadly) phase of the Covid-19 pandemic, since early 2021, data released yesterday shows the historical series of IEFP statistics compiled by Banco de Portugal.
If we don’t count the period of the pandemic, we have to go back to the time of troikacuts and “huge tax increases”, until mid-2013, only to see a more serious rise in the number of unemployed.
Unemployment has been falling since mid-2021, but this momentum has started to weaken since late last year, already reflecting the more hostile environment of rising interest rates and high inflation, which is holding back consumption and investment and could even lead to a recession . decline in the economy in the third quarter.
Presenting the 2024 state budget, Finance Minister Fernando Medina congratulated the “strength of the labor market”, the fact that “employment is at its highest” and “unemployment is low”.
However, those days may be over. With an increase of more than 4%, as is the case, and already more than 300,000 cases, registered unemployment could soon no longer be ‘low’.
Economic slowdown
Although the number of subscribers to the IEFP has grown continuously since July, João Cerejeira, economist and professor at the University of Minho, devalues this trajectory and points instead to the origin of unemployment, due to the slowdown in the industry. . ‘There is variation [homóloga] very strong in the industrial part, especially in the export sector. This would already be expected, taking into account the economic slowdown in some European countries, especially Germany,” he argues. This is evidenced by the fact that the number of people registering for the IEFP in these sectors has grown since May.
In September alone, the number of people registered with the IEFP in these three sectors was 12,992, of which 7,122 were in the garment industry and 3,358 in the leather industry. The textile industry contributed 2,512 unemployed people. Data indicates year-on-year growth of over 40% in leather (969 more registered), 19% in clothing (1,137 more unemployed) and 14.4% in textiles (316 more people than a year ago).
In May, annual growth already ranged between 2.9% for clothing and 4.1% for textiles – with leather recording another 3.9% of the unemployed -, in June it rose to 7.4%, 6.8 and 6.1%. In July the year-on-year increase reached double digits, with increases of 12.5%, 15.4% and 12.2%, and in August it was already 16.7% higher in the clothing sector, 22.9% in the leather sectors and another 14.2% in the leather sectors. textile.
Even more bankruptcies
Figures that coincide with the problems of these sectors, especially the textile and clothing sector, whose exports have fallen since the beginning of the year, with business associations already pointing to the end of the year with a decline of 5% to 7% in sales to international markets. On the other hand, insolvency data are also increasing, giving substance to the perceived weaknesses. Data from Informa D&B shows that between January and September this year, the number of bankruptcies in the fashion industry, which precisely includes the textile, clothing and footwear sectors, increased by 95%, compared to the same period last year, from 82 to 160. bankruptcies.
The metallurgical industry also recorded an increase in the number of registered unemployed in September, totaling just over three thousand, corresponding to a year-on-year increase of 4.5%.
Germany is the main destination market for both footwear and metals exports and yesterday the Bundesbank’s monthly bulletin indicated that Germany’s gross domestic product (GDP) should have “contracted slightly” in the third quarter, highlighting several factors, such as weak external demand for industrial products and increased financing costs are hampering the local economy.
Climb across the continent
In regional terms, the IEFP indicates that unemployment rose year-on-year across the continent in September 2023, especially in the center (+7.0%) and in the Algarve (+6.8%). In the Azores and Madeira there was a year-on-year decline of 14.1% and 27.6%.
Regarding the different occupational groups, the IEFP emphasizes that the most representative, in descending order, are ‘unqualified workers’ (26.0%), ‘personal service providers, security personnel and salespeople’ (19.5%), ‘specialists in intellectual and scientific area’. activities” (12.3%) and “administrative staff” (12.0%).
At the end of September, 15,837 vacancies needed to be filled across the country, 3,234 fewer than in September 2022, a decrease of 17%.
During the month of September, 56,687 unemployed people registered with employment services across the country, a number lower than the number in the same month of 2022 (-981; -1.7%), but higher compared to the month before August (+ 15,190). +36.6%). In September, a total of 12,719 vacancies were advertised across the country, a higher number than in the same month of 2022 (+405; +3.3%) and compared to the previous month (+3226; +34.0%) .
With Luís Reis Ribeiro
Source: DN
