Polish employment growth slowed to 1.2% y/y in Q2, data from the National Bank of Poland showed on October 7. The deceleration appears to stem from reduced labour supply, with vacancies hitting a new record of nearly 100,000.

While the result represents an increase of 0.5pp compared with the growth seen in Q2 2014, it was a slowdown on the previous quarter. The first three months of 2015 saw employment rise 1.7%. 

Labour supply has been going down in Poland since the start of 2015 and indicates a reversal on the growth trend that has been in place since 2007, the NBP also notes. The central bank attributes this to diminishing number of people in working age, coupled with limited professional activity amongst people of pre-retirement age.

However, despite slowing employment growth, the labour market continues to tighten. With unemployment on the decrease – joblessness dropped to 9.9% in September, an annual decrease of 1.6pp, according to estimate from the labour ministry from October 7 – wages growth is set to accelerate, the central bank suggests. Wages expanded 3.1% y/y expansion in Q2.

“Data from the enterprise sector for the first two months of Q3 suggest wages’ growth will accelerate further, which should also become evident in data for the entire economy,” the NBP said.

Polish companies are already struggling to fill vacant posts, of which they are estimated to have 400,000, much more than the NBP's data would suggest. A shrinking working age population and emigration are chief causes, alongside an education system that is believed to produce too few skilled workers.