Simultaneously, there was a decrease in the employment rate what was left in 57.5%. This corresponds (according to the INE estimate) to 1,677,000 employed workers in the country. The rate is same as January 2022 (a year ago), so that the level of employment remains close to that registered a year ago, after a certain decrease over the middle of the year.
The activity rate, responsible for the increase in unemployment
More unemployment with a modest decline in employment are trends that are explained by a higher activity rate in the labor market, that is, more people offering their labor.
Unemployment rises when employment falls and/or when there are a greater number of people in the market, without employment increasing by the same magnitude. The latter is what is prevailing, with an Activity Rate (people employed or unemployed with respect to the population of working age) that is almost at 63%
In any case, there is a growing business concern for sustaining jobs. Although the construction sector maintains a strong dynamic with a permanent increase in the number of workers on construction sites, service sectors still show a certain lag compared to pre-pandemic levels.
The exchange difference with Argentina affects the Uruguayan coast
One of the factors that affects this, among others, is the competition that trade is suffering due to the situation in Argentina, where many Uruguayans go to make purchases due to the exchange difference, exacerbated by the parallel exchange rate.
This problem affects the coastal trade in a very direct way, but also in consumption in general and in the capital. In addition, the overall spending of Argentine tourists in Uruguay has certainly decreased, even though the number of visitors has remained at good levels.
The dollar factor affecting competitiveness
Beyond the situation with Argentina, there is growing concern about the competitiveness problems that afflict the Uruguayan economy.
Indeed, the dollar drop in real terms and in terms relative to the countries with which Uruguay trades or competes commercially, it makes it difficult for sectors that export or compete in the domestic market with imports to maintain jobs.
In the latest quarterly survey of the National Chamber of Commerce and Services (CNCS) 16% of Montevideo merchants plan to increase their workforce, but 6% plan to reduce it. In the interior the figures are 12 and 7% respectively. In any case, the vast majority of merchants plan to keep the jobs in their companies.
Source: Ambito
