The Czech & Slovak labour supply market grew by 1.1% in value last year. For 2023, Interconnection Consulting forecasts a further increase of 4.2%. However, the markets of the two countries are developing very differently. The number of provided workers declined in both countries in 2022. In the Czech Republic, the decline in placements was more than compensated for by higher wages and a strong currency, so that overall turnover growth rose by over 4%. In Slovakia, however, both the number of placements and the turnover of the sector declined (-4.4%). In total, turnover in both countries amounted to almost €°850 million. Higher growth rates in the temporary staffing segment are expected for 2023, also because the recruitment process of Ukrainian and non-EU nationals has become easier. In 2022, the easier integration of refugees from Ukraine into the company contributed to the fact that mainly positions without qualification requirements could be filled. "However, Ukrainian refugees will not be able to perform miracles in the labour market either," says Pan. Trained male workers in particular are not allowed to leave the country, Pan added. In addition, Ukrainian refugees tend to move even further west. In any case, wage increases will be clearly noticeable in 2023 and will increase the industry's turnover. Overall, the labour segment storage & industry takes the largest share of turnover in the temporary staffing sector with more than half of the turnover. Technical & engineering occupations follow at a great distance with about 18%. The job groups construction, IT & telecommunication and health have the greatest growth potential. Permanent Staff Wanted The unemployment rate in the Czech Republic is one of the lowest in the EU. Therefore, companies struggle to find suitable workers for both highly specialised and less demanding positions. Due to this, companies prefer to hire new employees on a permanent basis. "A trend can be observed towards permanent placements increasing their share in the turnover of staffing companies," explains Monika Pan, the author of the study. In light of the ongoing unpredictable situation, employers started to rely more on the permanent staffing pool as early as 2022, so that the turnover share of this segment increased to 12%, which is almost 3.5% higher than in Slovakia. However, the situation in Slovakia is similar. During the pandemic, many companies used temporary staff as a low-cost solution to cope with fluctuations in demand and to remain flexible. Now, the prevailing shortage of skilled workers, which leads to frequent downtimes and, in some segments, to production cutbacks, is causing companies to rely more on the permanent segment, which will also lead to a further increase in this segment in Slovakia. The main companies in the market are, in alphabetical order: Adecco, Gi Group, Index Noslus, Manuvia, Manpower, Randstad, Trenkwalder.

Last year, the temporary staffing market in the CEE countries (Poland, Czech Republic, Slovakia, Hungary and Romania) was no longer affected by the pandemic restrictions. Other challenges, such as high inflation and the energy crisis, were in the focus of employers. The market for staffing services grew by 6.7% to €3.6 billion last year. In the next few years, the market volume will increase by another 3% annually, according to a study by Interconnection Consulting. Overall, temporary staffing provision accounted for about 80% of the industry's total business in the CEE region in value terms. The share of unskilled labour will rise to 45.4% in 2023, while skilled workers account for about 42%. Poland, the largest CEE market, has shown an exceptionally strong recovery since the pandemic. Future growth for the temporary staffing sector is projected at 3.4% annually in value terms. The situation in Romania is even more dynamic. The market, with a volume of around €770 million, will grow by around 6% annually until 2026.  The next years 2023 and 2024 will benefit from the postponed projects and the material bottlenecks during the pandemic. "Companies are trying to compensate for the shortage of well-trained workers by recruiting EU foreigners, especially from Asia," explains Monika Pan, the author of the study. The situation is similar in Hungary, where residence permits have been made easier for people from the Philippines, Vietnam or Indonesia, for example. In 2022, however, the market for personnel services in Hungary grew by only 2.1%. Above all, the high inflation of almost 13% contributed to this. For the next years until 2026, a decline of 1.3% in value is even expected for temporary staffing. Czech Republic and Slovakia Rely on Permanent Workers In the Czech Republic, the share of employees hired permanently by companies is now rising to 12%. The market for personnel services will grow by an average of 3.1% annually until 2026. The unemployment rate is very low, so companies are desperately struggling to find suitable employees for highly specialised and less specialised positions. Once found, companies then also prefer to retain them permanently. Similar to the Czech Republic, the share of permanent workers in Slovakia is now rising to more than 8.6%. The average growth for the temporary staffing industry will be lower than in the Czech Republic at 1.1%. Large Staffing Companies at an Advantage The storage & industry sector is the strongest segment across all countries surveyed with a share of 42.5%, followed by technical staff & engineering. The strongest growth potential is in construction, IT & telecommunication and healthcare. Despite the large number of small companies, especially in Poland, it can be seen that the market share of the large providers is increasing, mainly because they are better able to adapt to the challenges of a currently difficult market environment. Companies such as Randstad, Adecco and Manpower have the appropriate organisational, technical and financial resources to stay on top, according to Pan. Gi Group has also strengthened its position in the CEE countries mainly through the acquisition of smaller providers. Top companies in the CEE region are, in alphabetical order: Adecco, APT Prohuman, Gi Group, Index Noslus, Interkadra, Lugera, Manpower, Randstad, Trenkwalder, WHC.

High interest rates and the increased need for equity in mortgage loans, caused demand for loans to fall dramatically. This is compounded by massive increases in construction costs, which far outpace core inflation. Building permits fell 13.1% in 2022. Construction completions in 2023 in the DACH region will therefore also plummet by a double-digit percentage amount (-11.5%), as a study by Interconnection Consulting shows. Within the DACH region (Germany, Austria, Switzerland), the number of housing completions in Austria is higher in relation to the number of inhabitants than in the other two countries. While three apartments were built per 1000 inhabitants in Germany in 2022, the figure in Austria was 6.7. In Switzerland, 5.5 apartments were built per 1000 inhabitants. For this year, residential construction in Austria will also show a higher dynamic than in Switzerland and Germany, but at a lower level. In Austria, the decline will be particularly sharp at 15.5%. Whereas around 60,000 apartments were completed last year, the number will fall to around 50,000 this year. A similar reduction in construction momentum is also evident in Germany. In Switzerland, the decline is still a moderate 5.2%. The number of completed housing units per 1,000 inhabitants is down to 5.6 in Austria, 2.7 in Germany and 5.2 in Switzerland. Construction momentum for single-family homes plummets Overall, the DACH region is showing a trend toward multi-story residential construction (MGWB). This trend is being further fueled in particular by the sharp rise in mortgage lending rates, explains Ernst Rumpeltes, author of the study. "Especially the construction of single-family homes is collapsing sharply." In 2018, the ratio of MGWB to single- and two-family homes was 65 to 35. In 2023, nearly 71% of all housing units will be completed in multi-story housing. This proportion should not change much in the next few years.

In Germany, the number of window units sold will fall by 5.4% this year. The reason for this is a large decline in building completions (-11.8%). With the exception of Saarland, all federal states are experiencing declines in window sales, according to a new study by Interconnection Consulting, which examines the market down to the state district level. Overall, window sales will fall from around 15.4 million units to 14.6 million units in 2023. The strongest overall declines in window sales were recorded in the federal states of Brandenburg (-8.7%), Rhineland-Palatinate (-7.8%), as well as Schleswig-Holstein and Bremen with -7.7% each. Regions in the east fared best. In Mecklenburg-Western Pomerania and Thuringia, window sales declined by only 3.4% and 3.0% respectively. Bavaria is the German state with the highest sales, with around 3.2 million units sold, ahead of North Rhine-Westphalia with 2.8 million units sold. This is followed by Baden-Württemberg and Lower Saxony with 2.3 million and 1.5 million units sold, respectively, forecast for 2023. The top 10 cities account for about 17% of the window market in volume. Double-Digit Declines in the Residential Sector The decline in new construction is impacting sales in both the multi-storey residential segment and the detached and semi-detached house (EZH) segment. In the new-build EZH segment, the declines in the federal states are almost all in the double-digit range. Only Saarland is able to maintain window sales in this segment compared to 2022. Otherwise, the declines are all in the double-digit range. In the new multi-storey residential construction segment, Baden-Württemberg (-15.6%) and Berlin (-15.7%) and Bremen (-26.3%) show the strongest declines. The renovation sector must also expect slight declines for this year. Only three federal states (Bavaria, North Rhine-Westphalia, Saarland) are expected to achieve positive growth in this sector in 2023. Non-Residential Construction Hit Slightly Less The picture is similar in non-residential construction, with declines in both new construction (-8.3%) and renovation (-0.5%). The biggest setbacks in new construction were recorded in Schleswig-Holstein with -17.5%. Other federal states with a double-digit decline are Rhineland-Palatinate, Brandenburg and Hamburg. But the other federal states also mostly record only slightly lower declines. In the renovation sector it is Bavaria, North Rhine-Westphalia and Saarland with a positive forecast for this year. Tops & Flops in the District Area If you want to look for growth regions, you have to go mainly to the district level. The district of Frankenthal in the Palatinate will achieve growth of 15.6% in 2023 and thus leads the ranking ahead of Delmenhorst and Osnabrück. The negative ranking, on the other hand, is led by Wunsiedel in the Spruce Mountains with a decline of 21.5%, ahead of Altötting and Tirschenreuth.