Labour market trends, Quarter 1 2023
In the first quarter of 2023, employment continued to expand year-on-year, mainly due to a
pick-up in the primary labour market and an increase in foreign employment. The average
number of employed persons in the population aged 15-74 was 4 million 696 thousand, 21
thousand more than in Q1 2022. The number of the unemployed increased by 18 thousand to
199 thousand. The size of the potentially available labour force did not change, but its
composition did. The demand for additional labour has decreased. The purchasing power of
earnings fell due to high inflation.
Figure 1
Main labour market indicators
1
Slight increase in employment
In the first quarter of 2023, the average number of employed persons in the population
aged 15‐74 was 4 million 696 thousand, 21 thousand more than in the same period of
the previous year.
The increase in employment was mainly due to an 18 thousand increase in the number of
people employed in the primary labour market, but the number of people working abroad
also increased by 14 thousand. The number of people in subsidised employment as fostered
workers, on the other hand, fell by 10 thousand over a year to 68 thousand.
Figure 2
The employment rate of 15‐64 year‐olds averaged 74.3% in Q1 2023, 0.4 percentage
points higher than in the same period of the previous year.
2
In Q1 2023, the rate for women increased more than that for men, rising to 70.0% for women
and 78.7% for men.
The employment rate improved the most for the 55-64 age group, rising by 2.9 percentage
points in one year to 67.5%. This growth that has been going on for years is primarily related
to the continuous increase in the retirement age. The employment rate for 25-54 year-olds
remained high at 87.5%, after a slight decrease in Q1. Despite an increase of 0.6 percentage
points over the period, the young age group continued to be characterised by a low
employment rate of 28.0%.
Figure 3
Atypical forms of employment
Some atypical forms of employment reflect the flexibility of employment and work, while
others reflect the vulnerability of workers or unfavourable working conditions. In Q1 2023,
nearly 9% of the employed worked regularly or occasionally from home. The share of part-
3
time employment in Hungary is very low by EU standards. Women were more likely to work
part-time, with nearly 7% of women compared to 3% of men. By contrast, men were more
likely to work non-standard hours, such as evenings/nights or weekends, and were more
likely to work multiple shifts or alternating shifts.
Figure 4
Jász‐Nagykun‐Szolnok county saw the highest increase in the employment rate
In the first quarter of 2023, the employment rate of 15-64 year-olds increased the most in
Jász-Nagykun-Szolnok county, by more than 4 percentage points, as in the same quarter last
year. The growth was also around 2 percentage points in Nógrád, Borsod-Abaúj-Zemplén and
Hajdú-Bihar counties, which have a less favourable labour market situation. Several counties
were affected by the decline in employment, with Vas and Tolna counties being the most
affected. The employment rate was highest in Győr-Moson-Sopron (79.9%), ahead of
Budapest, and lowest in Somogy (68.0%).
4
Figure 5
5
Market services saw the largest increase in the number of employees
Employment1 in public administration, agriculture, mining and quarrying, water and waste
management stagnated or fell, while the other branches increased. In some branches, the
tightening conditions for the itemized tax of small taxpayer enterprises (kata) also
contributed to the increase in the number of employees, as some of the kata-paying self-
employed continued to work as employees from September last year.
Scientific and technical activities, accommodation and food service activities, and information
and communication activities grew by more than 5% in staff compared to the same period last
year, with increases of 13,700, 7,400 and 7,300 persons respectively. Within scientific and
technical activities, accounting, book-keeping and auditing activities and tax consultancy
increased the most in staff, within information and communication activities this was true for
computer programming, while in accommodation and food service activities, the recovery
after the Covid19 epidemic pushed employment up to above pre-epidemic levels.
Over 3% staff growth was recorded in administrative, financial and real estate services among
market services and in education and health care among public services.
Although there was also a significant increase in manufacturing (6,300 people), it was well
below the previous year’s increase. Most sectors saw an increase in the number of employees,
but there were smaller decreases in food, textiles and leather, and wood, paper and printing
(around 1,300 in total), and larger decreases in transport equipment (1,600).
1An employee shall be considered to be employed if he/she has an employment relationship with the employer
and is/may be obliged to perform at least 60 hours of work on average per month for a fee under his/her
employment contract or employment agreement. The average number of employees includes all employees,
excluding persons permanently absent from work for specified reasons (e.g. maternity leave, persons not
working for various childcare reasons, and from 1999 onwards, persons on sick leave for more than one
calendar month, persons on unpaid leave, etc.).
6
Figure 6
7
Unemployment has increased
In the first quarter of 2023, the average number of the unemployed was 199 thousand,
and the unemployment rate was 4.1% among 15‐74 year‐olds. The number of the
unemployed increased by 18 thousand and the unemployment rate by 0.3 percentage points
compared to the same period in 2022.
8
Figure 7
The rise in the unemployment rate affected women slightly more, with a rate of 4.1% for both
sexes.
The unemployment rate for 15-24 year-olds was essentially unchanged at 10.3%. Among the
older age groups, the rate for 25-54 year-olds rose by 0.4 percentage points to 3.7%, while the
rate for 55-74 year-olds increased by 0.2 percentage points to 3.2%.
9
Figure 8
In Q1 2023, the share of long-term jobseekers (at least one year) fell slightly to 33%, and
nearly 40% of the unemployed - almost 80 thousand people - started looking for work within
3 months.
10
Unemployment increased in the majority of counties
In the first quarter of 2023, unemployment rose or remained little changed in most of
the counties compared to the same period of the previous year. The largest increase was in
Bács-Kiskun county, where the rate rose by 2.0 percentage points. However, the traditionally
high unemployment rate in Szabolcs-Szatmár-Bereg county fell by 1.5 percentage points,
coupled with an improvement in employment. The highest unemployment rates remained in
Nógrád and Szabolcs-Szatmár-Bereg counties, at 8% or above.
Figure 9
11
The potential labour reserve has not changed
The unemployed, the underemployed and the inactive who intend to work but are not actively
looking for work or do not meet the availability criteria together constitute the so-called
potential labour reserve. In the first quarter of 2023, they included on average 299
thousand people, the same as a year earlier. The unemployed who are active in the labour
market represent an increasing share of the reserve, while the share of inactive people is
decreasing. Two-fifths of those in the potential labour reserve live in the Northern Great Plain
and Northern Hungary regions, one-third have at most a primary education and another third
have a vocational qualification without a school leaving certificate. The majority of those who
had some work experience were in manual work, typically in manufacturing and construction
or as fostered workers.
Figure 10
Figure 11
12
Despite the fact that the labour market has seen more labour reserve for fewer vacancies in
recent quarters, the supply side is currently unable to meet the demand side’s labour needs
due to structural (educational level and field, regional) mismatches.
Figure 12
Flows between economic activity groups within the population aged 15‐74 between Q4
2022 and Q1 2023
(as a percentage of the number of persons in the given activity group in Q4 2022)
In Q1 2023, there was not much movement between activity groups either, with a slightly
larger overall outflow in terms of numbers from the employed to the unemployed and inactive
than from these groups to the employed.
83 thousand vacancies to be filled
The number of vacancies that are vacant or will become vacant in the near future at the end of
Q1 2023 was 83 thousand2, 4.3% lower than at the end of the same period a year earlier. This
is the first time since 2020 that the number of vacancies has fallen compared to a year
earlier. Most vacancies were in tertiary occupations, accounting for almost a quarter of all
vacancies. The number of vacancies increased in managerial occupations, occupations
requiring the independent use of tertiary education and agricultural occupations, while the
number of vacancies decreased in the other main occupational groups.
2Based on data from enterprises with at least five employees, budgetary institutions and non-profit
organisations relevant for employment.
13
Figure 13
Compared to Q1 2022, demand for additional labour fell in more than half of the
sections, with the largest absolute decreases in manufacturing, wholesale and retail trade,
science and engineering and public administration. One of the reasons for the decline in the
demand for additional labour is the increasing employment of third-country nationals: last
summer, the conditions for employment of third-country nationals were eased for several
non-EU countries, resulting in a steady increase in the number of foreign workers, up 14% to
87 thousand in Q1 2023 compared to Q1 2022.
As a share of total jobs, administrative services - including temporary employment agencies -
had the highest vacancy rate (5.1%), but there was also a significant shortage in health and
social work (3.7%). Nationally, 2.5% of all jobs were still to be filled, 0.2 percentage points
lower than in Q1 2022.
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Figure 14
15
Growth in average earnings was pulled up by wage growth in the business sector
The average gross monthly earnings of full‐time employees3 reached HUF 545 700 in
Q1 2023, up 10.8% in nominal terms from a year earlier. The apparent slowdown in wage
growth can be attributed to the fact that in February 2022, the bonus distributed in defence
and the law enforcement sector significantly increased the base value. Excluding this bonus in
law enforcement and the military, the increase is estimated at 16.1%.
In 2023, the rate of scheduled wage increases was also below last year’s level, and the fiscal
tightening, which also affected personnel payments, restrained the growth of the budgetary
sector’s regular and non-regular average earnings.
Figure 15
Factors affecting average earnings and labour income in Q1 2023
3 Among enterprises with employees, non-profit organisations and budgetary institutions.
16
Real earnings fell sharply, by 11.6% overall in Q1, reflecting more subdued wage growth at
the economy-wide level and higher inflation. Excluding the impact of the bonus in law
enforcement and the military, the decline in real earnings is estimated at 7.4%.
Figure 16
The rise in the main component of earnings, regular average gross earnings net of
bonuses, premiums and 13th month pay, significantly outpaced the rise in total earnings and
was 2.4 percentage points faster than a year earlier.
The other important component of earnings, non‐regular earnings (bonuses, premiums,
13th month pay), declined at the economy‐wide level, as the average bonus in the
budgetary sector fell to one-tenth of its level due to last year’s high nominal value and this
year’s tight fiscal management. In the business sector, although non-regular earnings
increased, they increased slightly less than regular earnings.
17
Overall, including part-time workers, the full-time equivalent gross average earnings
increased by 11.6% to HUF 535 269.
Wage growth was highest in industry
In the first quarter of 2023, financial services was still the highest paying branch, but
information and communication was only slightly behind.
In the first quarter of the year, earnings grew fastest in industry, with manufacturing -
including transport equipment, electrical machinery and machinery manufacturing - and
mining and quarrying posting increases of over 20%. In market services, wage growth in
administrative services, including temporary agency work, which accounts for almost a third
of the branch’s workforce, was strong, while in transport, storage and arts and leisure, after
significant wage increases last year, wage growth was more subdued. Within public services,
public administration saw a significant fall in earnings, mainly due to the impact of the bonus
in law enforcement and the military on the base period. Excluding the impact of the bonus, the
increase would be estimated at 10.2%. The level of growth in health care was also below
average, as the wage increases and bonuses planned last year also significantly increased the
base.
18
Figure 17
19
Median earnings were 79% of the average
In Q1 2023, median earnings rose to HUF 429 000, and increased by 16.4%, more than the
average gross earnings. The median wage was not significantly affected by the February law
enforcement and military bonus last year, which had a significant impact on average wage
growth, and its increase was driven by, among other things, the increase in minimum wage
rates and above-average wage growth for manual workers. The median was 79% of the
average.
Figure 18
20
Net earnings grew slightly more than gross earnings
In the first quarter of 2023, average net earnings for full-time employees, taking into account
tax benefits and exemptions from taxes and contributions, were HUF 376 100, up 10.9%
over a year, 0.1 percentage point better than average gross earnings. Median net earnings
after benefits reached HUF 299 300, 16.8% higher than in Q1 2022.
Figure 19
21
Earnings disparities remain high
Earnings differentials remained high in Q1 2023, with the average salary of those at the top of
the wage hierarchy almost five times that of those at the bottom. The difference in earnings is
influenced by a number of factors: the most important are the occupation of the employee, the
level of education and skills required, the sector of employment, the size of the employer and
its ability to pay wages.
The rate of average wages for those in the extreme two quintiles4 has fallen slightly compared
to the previous year, as wages for those in the top quintile increased at a slower pace than
those in the bottom quintile in Q1 2023.
Figure 20
Regional differentiation of earnings continued to be significant, with the average salary
in the capital city more than 70% higher than in the last-ranked Szabolcs-Szatmár-Bereg
county, 11% higher than in the second-ranked Győr-Moson-Sopron county and 22% higher
than the national average. Regional differences are significantly influenced by the different
employment structure, the composition of the employed by sector and occupation, and the
different weight of public work schemes and their changes.
Earnings increased significantly in all counties, with Győr-Moson-Sopron county showing
an outstanding increase of more than 20%. High wage growth was also recorded in Komárom-
Esztergom and Pest counties, which also have a significant share of people employed in
industry. Lower growth - below 10% - was also recorded in the counties of Csongrád-Csanád,
Nógrád, Szabolcs-Szatmár-Bereg and Tolna, which have a smaller industrial base and/or a
higher share of budgetary workers, and in Budapest, which has a high nominal average wage.
4Earnings quintiles are obtained by ranking employees according to the size of their earnings and then dividing
them into five equal population groups.
22
Figure 21
Hungary’s employment rate remains above the EU average
Figure 22
23
In the EU, the Netherlands had the highest employment rate (82.1%) and Greece the lowest
(60.3%) in Q1 2023. Hungary ranked in the top third of Member States with 74.3%, 4.4
percentage points above the EU average. Among the V4 countries, the Czech Republic had the
highest employment rate (75.6%) and Slovakia the lowest (71.3%), but all four countries
were above the EU average (69.9%).
The employment rate for men was highest in the Netherlands (85.7%) and lowest in Croatia
(67.7%). The 78.7% rate for men in Hungary was 4.1 percentage points above the EU average,
making it the sixth highest rate in the EU.
Figure 23
24
Like for men, the employment rate for women was highest in the Netherlands (78.5%) and
lowest in Greece (50.8%). At 70.0%, the rate for Hungarian women was in the top third in the
EU, 4.8 percentage points above the EU average.
In the EU, the Czech Republic had the lowest unemployment rate (2.6%) and Spain the highest
(13.3%) in Q1 2023. Hungary’s unemployment rate of 4.1% was ranked seventh to eighth in
the EU, together with Ireland, and 2.2 percentage points lower than the EU average (6.3%).
For both sexes, Hungary’s unemployment rate was lower than the EU average.
Figure 24
Figure 25
25
Hungary’s demand for additional labour is just below the EU average
In the first quarter of 2023, there were 2.8 vacancies for every 100 jobs in the European
Union.5 Austria, Belgium and the Netherlands had the highest additional labour demand,
while Bulgaria, Spain, Poland and Romania had the lowest. In Hungary, the vacancy rate of
2.6% was higher than in half of the EU Member States, including neighbouring Romania,
Slovakia and Croatia.
Figure 26
Further data and information
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5 Scope: industry, construction, services (excluding activities of households and non-residential organisations).
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