Faster wage growth in lower-skill industries than in high-skill ones has led to a narrowing in the industry wage gap.
Labour market participation is expected to grow more slowly than the historical average this year, with the youth participation rate falling.
The rate of real wage growth is forecast to accelerate this year, above levels normally seen in Luxembourg.
Managing Director, Hays France & Benelux
Luxembourg’s economy keeps growing and forecasts are currently projecting economic growth of 3.5%. There has been a decrease in the unemployment level, bringing it to a very low rate of 5.3% in the first quarter of 2018. The war for talent is more than ever defining the recruitment market in the country. As of last year, some sectors such as information technology, construction and real estate, have been doing very well. However, 2018 is seen by many economists as the beginning of a profound change due to digitalisation, artificial intelligence, big data and strengthening of market regulations. The latter are all topics that require companies to anticipate new organisational models for tomorrow.
Tina Ling, Managing Director, Hays France & Benelux
The Luxembourg economy expanded by 2.3% in 2017, above the average in the EU.
The near-term growth outlook is positive, with the IMF forecasting GDP growth accelerating to 3.5 and 3.4% in 2018 and 2019 respectively, boosted by the global recovery.
The pick-up in demand increased the numbers employed by 3.8% in 2017. A significant proportion of the new jobs were taken by cross-border workers who commute into the country. This to some extent reflects skills mismatches and a social security system which creates some disincentives for local people from working, resulting in firms looking to recruit having to cast the net wide to fill the vacancies.