Luxembourg recorded 1.1% growth in Q4 of 2017, falling to 1% in Q1 of 2018 and then 0.9% in Q2. Compared with the same period in 2017, employment growth stabilised in 2018 at 3.7% in Q3, placing Luxembourg in joint-first for annual growth in all EU member states along with Cyprus.
Government figures, published in March 2018, show that in 2017 the employment sector in which the most jobs were being generated were in support services (+6% over a year), and IT and communication (+7% over a year). The former, it said, was driven by a need from accounting activities and services associated with company headquarters. While, the latter came from digital programming demands of the modern workplace.
Both sectors combined accounted for one in five jobs in the country and 34% of net new jobs created between Q4 of 2016 and Q3 of 2017.
An unexpected outcome of Britain’s departure from the EU, is the boost it has brought to the Luxembourg labour market. A number of financial and insurance companies opened or expanded offices in Luxembourg, or announced plans to move operations there to maintain EU passporting rights after Brexit. Luxembourg statistics body Statec published a report in which it was estimated some 250 jobs would be directly created in Luxembourg. It remains, however marginal compared to the 1,280 net jobs created in the financial sector in 2017.
To jobseekers, the prospect looks positive. However, closer inspection shows that employers are struggling. Luxembourg, like many countries, suffers from a shortage of skilled labour, particularly in fields such as IT and finance, which command the highest salaries. A 2017 Eurostat report found that employers struggled to fill 6 out of 10 IT specialist jobs in Luxembourg.
In its reponse to the new government’s programme (published 11 December 2018), the Luxembourg chamber of commerce called for a more efficient immigration regime to attract talent, researchers and startups.