OVI for October 2019: Labor market stagnates, seasonality of labor demand more pronounced
November 8, 2019
OVI index in October points to relatively similar levels of labor demand as in previous periods, both on an annual and a monthly level. Compared to October 2018, the index fell by 0.5 percent, while seasonally adjusted index values indicate a growth of 1.2 percent compared to the previous month—this stagnation in labor demand is in line with the general slowdown in economic momentum.
If a longer period is analyzed, the seasonally adjusted index values (and trend) show that job advertisements have been stagnating for almost two years following their sharp growth up until 2018. In addition to this stagnation, there is also a growing oscillation in labor demand evident from the trend values—labor demand resulting from the tourist season is becoming more pronounced. Such an interpretation is backed by the fact that nearly half of all job advertisements offer fixed-term contracts, while a decade ago this type of employment accounted for 20 to 25 percent of online job advertisements.
Although it might be too early to claim that the Croatian labor market is transforming toward a stagnant labor demand with a growing proportion of jobs of limited duration, the fact that we have not observed a significant increase in the number of job advertisements in the last two years, and that those two years have seen a record share of fixed-term contracts in total labor demand, is supportive of such a conclusion.
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.