Unemployment hits eight year low

Unemployment in Switzerland has fallen to its lowest level in eight years, dropping to 2.1 per cent in April, down from 2.3 per cent in March. The economics ministry said just over 75,000 people were registered as unemployed last month.

That’s nearly 6,000 fewer than in March, or a fall of 0.2 per cent.

Boris Zürcher, chief economist at the Federal Office for Employment, told swissinfo that the downward trend in jobless figures was expected to last.

“Growth is going to continue, the unemployment rate will further decline, so the prospects of the Swiss economy appear at the moment to be very bright,” he said.

Zürcher explained that most of the jobs being created remain in the service sector. But he also noted that in the first three months of this year the manufacturing sector has also started to recover, recording the second strongest performance next to the service sector in terms of job creation.

The data has been welcomed by analysts. Andreas Huffert, a Swiss economist at Warburg Dillon Reed, said the unemployment data “confirms the bright outlook for the Swiss economy”.

Expectations are that unemployment could fall below the 2 per cent level by the end of the year as the Swiss economy continues to expand. However this could lead to labour shortages in certain sectors of the economy, which might in time lead to inflationary pressures.

“For certain sectors, particularly information technology, they are already lacking workers, and this might give rise to wage pressure in the longer term,” Zürcher explained.

Analysts were also keen to point out that the official unemployment figures, although highlighting the strength of the economy, do not include everyone who is out of work. The real number, which includes the long-term unemployed, those on training schemes and those not claiming benefits is thought to be much larger.

“We have only the registered unemployed, that is the people who are without a job and who are registered with the regional placement offices in Switzerland. However there are always people who don’t register,” Zürcher added.

Among the cantons, French-speaking Geneva retains the highest unemployment level, at 4.5 per cent, while German-speaking Appenzell has the lowest unemployment rate of just 0.3 per cent.

by Tom O’Brien