Labor hoarding in CEE lower than in the Eurozone
Labor hoarding, coupled with structural and persistent low growth, could eventually result in increased unemployment, according to the European Stability Mechanism (ESM). It could further undermine resilience and impact the economy, public finances, and financial stability. The ESMs analysis suggests that labor hoarding is keeping the current unemployment rate about two percentage points higher in the Eurozone. In the region, however, labor hoarding seems to be less of an issue. The Labor Hoarding Indicator (LHI) of the European Commission measures the percentage of managers expecting their firms output to decrease, but employment to remain stable or increase. The LHI was at 10.1 percent, while the average for CEE7 was at 7.2 percent. Looking across the countries, labor hoarding is the highest in Hungary, where the Novembers value was at 15.3 percent (visibly above the Eurozone). In other countries, labor hoarding holds between 5 and 8 percent and has been declining lately.