OVI index

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Source: The Institute of Economics, Zagreb

OVI for November 2019: The biggest drop of OVI index in the past eight years
 

December 3, 2019


According to the seasonally adjusted data, OVI index registered in November a drop of -7.5 percent compared to the previous month, its biggest decrease on a monthly level in the past year. The decrease is even more pronounced on an annual level, since OVI index value amounts to -12.8 percent compared to November 2018, which is the biggest drop of the index in the past eight years.  After the index increased in the first quarter of 2019 compared to the end of 2018, a decrease was registered in the second and third quarters compared to the previous quarter, while based on the data for October and November, we expect the index to drop in the last quarter of 2019 as well. If the trend is not overturned in December, 2019 will be recorded as the year when labor demand decreased for the first time after the recession in 2010. Considering the fact that, despite noticeable GDP growth this year, labor demand is decreasing, it seems that labor market has reached certain saturation, at least when conventional advertising strategies are concerned.

The biggest decrease in the number of job advertisements in November on an annual level was recorded for the occupations of medical doctor/dentist, IT specialist, sales person, teacher and production worker, while the biggest increase was noticed in the financial, hotel management and hospitality sectors. Compared to November 2018, the share of advertisements seeking secondary and higher levels of education significantly decreased, while the share of advertisements offering permanent employment simultaneously rose, from 42.7 percent to 45.9 percent. When it comes to geographical distribution of jobs, the number of advertisements dropped in all regions. Although the drop on an annual level was the smallest in central Croatia, considering that 65 percent of all advertisements are related to this region, the region had, in November, the largest negative share in the overall drop of advertisements amounting to -4.6 percentage points.  

 
 

What is OVI?

Online Vacancy Index (OVI) is a monthly index of online job advertisements developed by the Institute of Economics, Zagreb in cooperation with the web portal MojPosao. The index aims to provide timely information regarding current labor demands. OVI index is developed by means of simple enumeration of single new job advertisements whose application deadlines end within the same month for which the index is being calculated. Given that advertisements published by only one web portal are taken into account, the number of job advertisements is expressed as an index (with the base year being 2015). 

The index is to be interpreted in such a way that the values greater than 100 represent growth when compared to 2015, and accordingly, that the values less than 100 represent a decrease with respect to the base year. Index is seasonally adjusted using the X-12-ARIMA method.

 
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