In September 2024, Luxembourg’s statistics bureau, Statec, its forecasts for 2024 and 2025, along with medium-term projections, indicating a slow recovery in economic activity. In the press , Statec noted that “employment is likely to struggle to exceed 2% growth, and unemployment is likely to remain above 6% until at least 2026.” This prompted Paperjam to take a closer look at the available data to better understand the future of Luxembourg’s job market.

Employment

Statec’s data reveals that both unadjusted and seasonally adjusted national employment growth rates have been declining since early 2022, signaling a broader slowdown in Luxembourg’s job market.

This trend reached a decade-low in June 2024 and remains significantly below the historical average of over 2% annual growth. The question remains whether the employment growth rate has hit its lowest point, as it hovers near the levels seen during the pandemic and the 2008-2009 financial crisis.

Jobs

The number of available jobs--an important indicator of business sentiment and economic outlook--is also on the decline. Data from Luxembourg’s national employment agency, Adem, shows a consistent drop in the number of vacant positions since mid-2022. As of September 2024, the 6,737 available jobs in Luxembourg marked the lowest level since January 2021 and were less than half of the 13,599 vacancies recorded in June 2022.

The decrease in available jobs, combined with an increase in the number of jobseekers, has pushed the ratio of unemployed individuals per available job from 1 in the summer of 2022 to nearly 3. As of September 2024, this indicates heightened competition for each vacancy.

Employers are formally required to post all job openings with Adem, but some firms are not always consistent, so these figures could mildly differ in reality.

Job loss

While Luxembourg’s agencies do not publish data specifically on unemployment following job loss, the number of individuals receiving unemployment benefits serves as a reliable substitute indicator. In the first nine months of 2024, an average of over 10,000 people received unemployment benefits. This figure is approximately 40% higher than the 2022 average and nearly 19% above the 2023 average, suggesting that businesses are likely laying off more employees than they are hiring in 2024.

It is also notable that, historically, the number of people receiving unemployment benefits was about half of the total registered jobseekers. However, this ratio has now risen to nearly 60%, indicating that the majority of current jobseekers are recent layoffs.

Reemployment

As of 30 September 2024, 60% of the 17,733 registered jobseekers had been unemployed for less than a year. This is a three percentage point increase compared to five years ago, in September 2019, when the figure was 57%, and a 5pp rise from 10 years ago, in September 2014, when it stood at 55%. The increase in short-term unemployment suggests a growing challenge in re-employment or possibly a surge in new jobseekers entering the market.

Older Jobseekers

Moreover, the number of older jobseekers is on the rise. In September 2024, 1,215 individuals aged 60 or older were registered as jobseekers, nearly double the 610 recorded in September 2014. While older jobseekers made up just 3.4% of the total registered jobseekers a decade ago, this figure has also doubled to 6.9%. This shift may point to a disproportionate impact of recent layoffs on older workers, who often face greater challenges in securing new employment compared to their younger or higher-skilled counterparts.