Six countries in Central and Eastern Europe have acute labour shortages, which can reduce their economic growth and even lead to recession, according to a report of Colliers International.
Bulgaria, Romania, Hungary, Slovakia, the Czech Republic and Poland have very low levels of unemployment, combined with dynamic growth, emigration and the fast development of the service sector.
“If the labour force riddle is not solved, then we foresee limitations to GDP growth, perhaps a recession and a likely shadow over private investment in the region in the medium to long run,” the report noted.
This will also affect negatively the demand for commercial real estate, which is now on the rise.
Numbers of unemployed and job vacancies in CEE-6 countries in March 2018 (in ‘000)
To deal with the situation, the six countries could try to bring back some of the workers who have emigrated to other European Union member states. However, the chances seem low. According to the report, just between 3% and 15% of those who have emigrated to Western Europe are expected to return to their countries by 2021 with the lowest rates forecasted for Romania (3%) and Bulgaria (4%), and the highest for the Czech Republic (15%) and Hungary (10%).
Immigration from former Soviet countries and elsewhere from the East could also help the six countries to overcome the labour shortage. However, they will only be attracted by rising wages.
“These two appear the most likely solutions for now,” the report noted.
The countries could also put effort into improving labour force productivity through better education and training. The participation rate of people aged 15-65 could also be increased via more investment and changes in legislation.
Size and breakdown of CEE populations in Western European countries in 2017