OVI for May 2020: Labor demand recovers, but is significantly lower than before the pandemic

OVI in May showed the first signs of recovery of labor demand, which dropped dramatically in April as a result of the break in economic activities caused by the coronavirus pandemic. Seasonally adjusted index values point to an increase of 40.6 percent compared to April 2020. However, although there are signs of recovery, labor demand levels are still far below those before the pandemic. For example, in May 2020 labor demand was 57.4 percent lower compared to May 2019. The two indicators show that although the pandemic has weakened and economic activities have resumed, it will take a while for the labor market to return to its full scope.
 
The relatively low labor demand compared to values before the pandemic is also reflected in the drop in demand for most sought-after occupations – demand for sales persons, waiters, and cooks fell by 72, 85, and 74 percent, respectively, compared to May 2019. Similar as in previous months, the occupations that are exempt from these dramatic trends are those that are involved in providing aid due to the pandemic and the earthquake in Zagreb. Compared to May 2019, the demand rose by 57 percent for bricklayers and 46 percent for nurses, while the demand for doctors and dentists rose by 21 percent. On a regional basis, all regions registered a significant fall, particularly the southern and northern Adriatic, which in May 2020 registered a 70 and 68 percent drop, respectively, compared to May 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.