The unemployment rate in Cyprus dropped to 4.4% of the labour force in August, from 5.2% in July, with the Finance Ministry confident that the trend will continue.
This correspond to 20,000 people registered as being out of a job, compared to 23,000 in July, 38,000 in June and 49,000 in May.
By gender, unemployment among men was 3.9% in August from 4.6% the previous month, and for women it improved to 5% from 5.8% in July. No data was available for youth unemployment, under 25s.
The ministry said that based on the latest Eurostat monthly survey, the seasonally adjusted unemployment rate dropped to 4.4% from 8.6% in August last year, “continuing the significant downward trend that started in July 2021.”
It added that the Cyprus rate was “far lower the Euro area average and is among the lowest among EU member states. The corresponding unemployment rate was 7.5% in August, compared to 8.6% in the corresponding month in 2020.”
The June unemployment rate in June was 8.2% and in May 10.4%.
The EU average was 6.8% in August and 7.7% in the year earlier month, according to Eurostat.
The finance ministry announcement claimed that based on the above data and a significant GDP growth rate for Cyprus in the second quarter of 2021, “suggest that the economy has entered a growth path and creation of positive prospects, as a result of the right fiscal policy of the government.”
“Unemployment is expected to continue on its downward trend returning to pre-crisis levels. This shows that the timely and targeted measures taken [by the government] have significantly contributed to containing unemployment,” the ministry concluded.
Employment short-term boost
Explaining the opposite trend of a rise in employment in the second quarter of this year, Sapienta Economics said in its latest Country Analysis that as would be expected, the largest increase was in the tourism sector, where there was a year-on-year rise of 2,492 or 5.2%. The smallest increase was in wholesale and retail trade.
“The retail sector is less seasonal than tourism and if our assumption that shops have been heavily discounting is true, retailers will have had little financial capacity to expand employment,” said Sapienta’s Director Fiona Mullen.
The monthly economic analysis added that the job vacancy rate, at 2.6% in the second quarter, was the highest it had been for the same quarter since 2009.
It added that just under 35% of the labour force is non-Cypriot, according to data from the Social Insurance Department, therefore the ability of workers to travel to Cyprus could be a key factor in the high vacancy rate.
“As with the growth of employment, the highest vacancy rate was in the tourism sector. Among the major sectors this was followed by manufacturing (5.5%) and healthcare (4.9%).
“A high vacancy rate in manufacturing would have been because of a sharp increase in activity but also potentially because of the difficulty in hiring workers from abroad as travel restrictions remained in force,” the Sapienta report concluded.
Unemployment down in EU and EA
Eurostat estimates that 14.47 mln men and women in the EU, of whom 12.16 mln in the euro area (EA), were unemployed in August 2021. Compared with July 2021, the number of persons unemployed decreased by 224,000 in the EU and by 261,000 in the euro area. Compared with August 2020, unemployment decreased by 1.965 mln in the EU and by 1.861 mln in the euro area.
In August, the euro area seasonally-adjusted unemployment rate was 7.5%, down from 7.6% in July and from 8.6 % in August 2020. The EU unemployment rate was 6.8% in August, down from 6.9% in July 2021 and 7.7% in August 2020, said Eurostat.
In August, 2.83 mln young persons (under 25) were unemployed in the EU, of whom 2.32 mln were in the euro area. In August, the youth unemployment rate was 16.2% in the EU and 16.4% in the euro area, down from 16.4% and 16.7%, respectively, in the previous month.
Compared with July, youth unemployment decreased by 66,000 in the EU and by 63,000 in the euro area. Compared with August 2020, youth unemployment decreased by 508,000 in the EU and by 471,000 in the euro area.
By gender, the unemployment rate for women in August was 7.2% in the EU, down from 7.4% in July. The unemployment rate for men was 6.5% in August, stable compared with July.
In the euro area, the unemployment rate for women decreased from 8.1% in July to 7.9% in August, while the unemployment rate for men remained stable at 7.1% in August.