OVI for February 2018: Visible consequences of GDP slowdown

In February 2018, OVI rose by 28.9 percent when compared to the same month of the previous year, indicating continued strong growth in labor demand on an annual level. However, observed on a short-term basis, seasonally adjusted index values suggest that the number of job advertisements in February was lower than the month before, by -0.7 percent. Considering that labor market indicators usually reflect GDP movements with a time lag, the lower OVI in February seems to be a consequence of the slower GDP growth rate, which amounted to only 2 percent in the fourth quarter of 2017, considerably below growth rates recorded in previous quarters.

In terms of occupations, the highest demand in February was recorded for sales assistants, cooks, waiters, programmers and drivers. Over a third of the job advertisements in February required secondary education level, while less than 10 percent required university degree level. Another indicator of slower growth is the fact that just 38 percent of the advertisements represented fixed-term employment, which is the lowest share in the last nine months.

 

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.