The State Secretariat for Economic Affairs (SECO) has announced a further increase in the unemployment rate in Switzerland. The number of unemployed people in July 2024 increased by 3,198 people (+3.1%) compared to the previous month, bringing the total unemployment to 107,716. Compared to the same period last year.
the number of job seekers increased by 20,115 people (+23.0%). SECO expects the unemployment rate to reach 2.3% in July 2024. The seasonally adjusted number of unemployed people increased by 2,436 people (+2.2%) to 114,684 people, and the seasonally adjusted unemployment rate increased by 0.1 percentage points compared to the previous month to 2.5%. According to the report of the State Secretaries of State for the Economy (SECO), the regional unemployment verification centers (RAV) registered 105,465 unemployed people at the end of May 2024, which is 1,492 fewer than the previous month. The unemployment rate in this month was 2.3%, consistent with the previous rate.
Compared to the previous year, the number of unemployed people increased by 17,389 people (+19.7%). As for young people aged 15 to 24, their number decreased by 162 people (-1.8%) to 8,924 people in May 2024. Compared to the same period in previous years, this month saw an increase of 1,367 people (+18.1%). The unemployment rate for young people up to the age of 24 rose by 2.0 percentage points over the month to 2.2%, while for people aged 50 to 64, it remained unchanged at 1.2% and for the middle bracket, the unemployment rate was 2.6%. By region, the unemployment rate was 0.2% in German-speaking Switzerland and 3.3% in French-speaking Switzerland.
Unemployment and current changes
In July 2024, the Swiss labour market faces various challenges that affect unemployment rates and job vacancy patterns. Understanding these challenges and current trends is crucial to help determine future growth paths and provide sustainable employment opportunities for the population.
Unemployment and current changes: In July 2024, the State Secretariat for the Economy (SECO) reported that the number of unemployed people in Switzerland had risen to 107,716, an increase of 3.1% on the previous month. SECO expects the unemployment rate to reach 2.3% in the same period, compared to 2.0% a year earlier. This increase reflects multiple challenges facing the labour market, including global economic conditions and structural changes within the Swiss economy.
Key factors behind the rise in unemployment
1. Global economic influences: The Swiss labour market has been affected by global economic challenges such as the general economic slowdown and current geopolitical uncertainty.
2. Structural shifts: Traditional sectors such as traditional industries are experiencing structural shifts towards innovation and digital technology, leading to increased demand for new skills and reduced demand for traditional workers.
3. Demographic changes: Switzerland faces challenges resulting from the ageing of the population and its effects on the labor market, which requires strategies to enhance labor force participation and prepare them for the changing labor market.
Government measures and policies: To address these challenges, the Swiss government has taken several measures and policies, including:
• Strengthening education and training: Investments in vocational education and training to prepare young people and adults for the new labor market requirements.
• Strengthening innovation and technology: Supporting innovation and digital transformation in companies to enhance their global competitiveness and increase employment opportunities.
• Strengthening professional integration: Implementing programs to enhance the integration of vulnerable groups into the labor market, such as young people and people with disabilities.
Future expectations on controlling inflation
Economists expect the Swiss labor market to continue to adapt to current challenges and to see a gradual improvement in performance as the global economic recovery continues and companies adapt to structural changes. Government and private sector efforts to support innovation and enhance productive capacities are expected to continue to support sustainable growth in the labor market.
As one of the world’s largest economies, Switzerland faces significant challenges in managing its labor market in light of current economic and social transformations. These challenges require rapid and coordinated responses from government and companies to ensure sustainable economic growth and improve future job opportunities for citizens.
In June, this rate stood at 1.9% and 2.3%, respectively. The statement said that the number of people who exhausted their unemployment benefits in May was 2,497. During the same month, the reduction in working hours affected 4,798 people, a decrease of about a fifth compared to April, and the number of affected companies decreased by 1.23% in one month to 223 companies. The country is about to bring inflation under control, while the winter has been fruitful for workers in tourism and industry.
An analysis of the Swiss economy in the first quarter of 2024, by sector.
Decrease in inflation and contraction in growth: Specialists from the State Secretariat for Economic Affairs (SECO) continue to expect weak growth in 2024, with a projected increase in GDP of 1.1%. “The global economic situation until recently seemed very mixed,” the SECO noted in a press release issued in mid-March.
Despite strong growth in the United States and China, the economy remained stagnant in the eurozone, and even declined in Germany, the largest recipient of Swiss exports. Growth in the eurozone is expected to remain moderate in the coming months, and to continue to hold back Swiss exports.
Inflation continues in recent months
The Swiss National Bank (BNS) surprised everyone by cutting its key interest rate to 1.5% on March 21, compared to 1.75% previously. Inflation had continued to decline in recent months in the country, falling from 1.7% in December to 1% in March. This was significantly lower than the 2.4% recorded in March in the eurozone and the 3.2% recorded in February in the United States.
This sudden improvement in consumer prices prompted the Swiss National Bank to act quickly, at a time when experts had not expected a rate cut before June. The Swiss National Bank is also optimistic about future price developments, as it is counting on an inflation rate of 1.4% this year, which would be significantly lower than the 2% threshold it has already set.
Watchmaking industry recovers: After more than two years of continuous growth, Swiss watch exports recorded their first significant decline in February (-3.8% year-on-year). “We are back to normal,” says Jean-Philippe Bertschi, watchmaking expert at Bank Vontobel. The drop in exports in February was particularly pronounced in China (-25.4%) and Hong Kong (-19%). However, these figures must be put in perspective, according to Jean-Philippe Bertschi.
February 2023, which serves as a comparison month, was marked by the resumption of watch sales in China, following the lifting of the health restrictions imposed by Beijing due to Covid-19. Bank Vontobel therefore maintains its export growth forecast for 2024 at between 2% and 4%.
This return to normal is also evident in the second-hand watch market, where prices for steel watches, the best-selling*, have fallen significantly. Jean-Philippe Bertschi confirms this, saying: “The post-Covid boom was partly linked to the emergence of cryptocurrencies and the savings accumulated by consumers during the health crisis. This return to normality has completely eliminated demand from speculators and speculators.”
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