Unemployment on the Rise Again

Iran War Halts Positive Trend in the Job Market

Once again, over 400,000 people are out of work.(Bild: Eva Manhart)

Unemployment had just begun to decline, but the recovery has already stalled again due to the Iran crisis. In March, the number of people without jobs rose by 0.9 percent to over 400,000. Women and older workers are particularly affected, more so than a year ago.

Uncertainty among businesses and rising inflation are also taking their toll on the job market. According to the latest figures from the AMS, 400,500 people were unemployed in March—3,500 more than in February.

Middle East War Halts Trend Reversal
“While the number of unemployed men and training participants is falling for the first time—by 2 percent compared to last year—the number of women continues to rise significantly, by 4.5 percent,” says AMS Executive Board Member Petra Draxl. Overall, this results in an increase of 0.9 percent. “However, the announced turnaround was halted by the war in the Middle East,” says the AMS executive. The war in Iran is weighing particularly heavily on corporate expectations. Due to the deteriorating economic climate and rising costs, many business owners are more hesitant to hire new employees. Caution prevails, as many are uncertain about how the rest of the year will unfold. In many places, the order situation is also not picking up as strongly as hoped.

The picture varies across the federal states: Styria, Burgenland, Lower Austria, and Vorarlberg are seeing stronger increases, while the labor market remains relatively stable in Upper Austria, Tyrol, Salzburg, and Vienna; only Carinthia shows a significant decline, with a 4 percent drop.

Once again, over 400,000 people are out of work.(Bild: Eva Manhart)

The announced turnaround was halted by the war in the Middle East.

Petra Draxl, AMS-Vorständin

Bild: Eva Manhart

More foreigners are finding work in Vienna
The decline in the southern state is primarily due to demographic factors, according to the AMS. Carinthia is the only state where the population is actually shrinking because more people are moving away than moving in. This also reduces pressure on the labor market. In Lower Austria and Styria, on the other hand, the poor economic situation in industry is a driving factor, which is why these two regions are leading the way in terms of increases.

In the capital, Vienna, the slowing trend is primarily linked to foreign nationals. It appears that more asylum seekers and beneficiaries of subsidiary protection are entering the labor market; within this group, unemployment fell by as much as 14 percent year-over-year. At the same time, fewer people are moving to Vienna overall, which is easing pressure on the labor market.

The picture is not clear across all sectors: Construction and tourism are showing declines, while the increases in retail (+4.6 percent) and healthcare (+10.6 percent) are cause for concern.

The weak economy is also reflected in job postings. The number of job openings reported to the AMS has fallen by 8.8 percent compared to the same month last year, to 74,500.