OVI for April 2020: Expected sharp drop in labor demand

OVI in April reflected the break in economic activities caused by the coronavirus pandemic. Compared to April 2019, the index dropped by 71.7 percent, while seasonally adjusted index values point to a decrease of 61.1 percent compared to the previous month. Although this is a strong decrease on a monthly level, lowering labor demand to April 2013 levels, this sharp drop was expected, as nearly the entire month of April was marked by restricted economic activity in order to fight the pandemic. However, as the epidemiological situation in Croatia seems relatively favorable, which has enabled an easing of the measures, it is possible that the labor demand absent in April will simply be transferred to the following months.
 
The drop in the OVI index can be seen across nearly all occupations, including those that are most sought-after – demand for sales persons, cooks, and waiters fell by 86, 85, and 84 percent respectively compared to April 2019. Nearly all sought-after occupations, particularly those from the service sector, registered a significant decrease: compared to the previous year, there is a demand for almost 95 percent less hotel managers and 91 percent less all other tourism professionals. Occupations that are exempt from these dramatic trends, as last month, are those occupations involved in giving aid due to the pandemic and the earthquake in Zagreb. Compared to April 2019, the demand rose by 160 percent for nurses, while the demand fell by 4 percent for doctors and dentists, and by approximately 6 percent for bricklayers and carpenters. On a regional basis, all regions registered a significant fall, particularly central Croatia, which in April 2020 registered a 74 percent drop compared to April 2019.
 

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.