According to the Inflation Report published by the NBR, during the period from October 2016 to January 2017, the number of employees in the economy kept rising at the relatively robust pace it had posted since the beginning of 2016 (+3.5 percent in annual terms). The advance was further ascribable to hiring in market services in particular, with trade, administrative and support service activities, and transport making significant contributions, bolstered by the brisk pace of increase of consumption.
Moreover, hires were also made in the budgetary sector, being more sizeable in the public healthcare sector (after a rise in the number of jobs was decided in the latter half of 2016), whereas payrolls contracted further in education. Conversely, the annual dynamics of workers were stuck at around 2 percent in industry, whereas the growth in the number of employees in construction kept decelerating, amid the failure to launch the large‑scale infrastructure projects expected in this sector.
The higher capacity of the economy to absorb workforce was also accompanied by a decline in excess supply, so that both unemployment rates lost nearly 0.2 percentage points in the period under review as compared with 2016 Q3, i.e. the registered unemployment rate went down to 4.6 percent and the ILO unemployment rate to 5.5 percent, the latter hitting an all‑time low of 5.4 percent in January.
In this context, labour market conditions have further tightened, the skill mismatch still persisting also reflected by the progressive rise in the number of unemployed not receiving unemployment benefits. Their share in total unemployed registered with the NEA exceeded 80 percent in 2016, which hints at the difficulty of absorbing them into the workforce, probably on account of their inadequate skills.
Prospects for employment appear to be mixed for the first half of 2017. On the one hand, the results of the Manpower survey show robust employment intentions, pointing to job opportunities across all regions and business sectors for the first time since 2008. By contrast, the DG ECFIN survey indicates a stable hiring pace in industry and services and a relative worsening in construction.
In the period from October 2016 to February 2017, average net wage earnings kept increasing at a fast pace, which added 0.4 percentage points from 2016 Q3 to 14.1 percent. The evolution mirrors a pick‑up in the dynamics of wage earnings in the private sector, stemming from the increase in the gross minimum wage economy wide to lei 1,450 (+16 percent) in February 2017 and the payment of occasional bonuses (particularly in tobacco industry and trade – the fast employee turnover rate in the latter sector strengthening companies’ efforts towards building staff loyalty. Conversely, wage growth slowed down in the budgetary sector, solely as a result of a base effect, additional pay rises being granted to employees in healthcare (December 2016), education (January 2017), public administration and to actors (February 2017).
The Inflation Report was approved by the NBR Board in its meeting of 5 May 2017 and the cut-off date for the data underlying the macroeconomic projection was 28 April 2017.