Credit: Statec; ADEM

In its latest "Conjoncture Flash" report, the national statistical agency Statec has pointed to signs of an economic slowdown in Luxembourg.

According to the Statec report, the Luxembourg labour market is starting to suffer from the economic slowdown in Europe. Employment is slowing whilst unemployment is no longer falling and the leading indicators point to a further deterioration of the situation in the coming quarters.

Salaried employment increased 3.6% year-on-year in the fourth quarter of 2019, compared with 3.7% and 3.8% in the previous quarters. Indeed, the report confirmed that most branches have shown signs of a slowdown in job creation.

While the services sector remained the main creator of jobs at the end of 2019, both it and the financial sector saw the most marked slowdown. The former was mainly affected by a decline in temporary agency work, whilst the latter namely suffered from a slowdown in investment and pension fund management, according to Statec.

In addition, the announcement of job cuts (around 550 planned for the months to come) have damaged employment prospects in the banking sector. And yet, the financial sector still managed to grow at a rate of 3.1% at the end of 2019 (fourth quarter) - partly due to Brexit-related relocations, according to the report.

Statec added in its report that trade and the public sector were the only branches where job creation continued to accelerate in 2019, the former due to the opening of new shopping centres (notably Cloche d'Or) and the latter due to the reform of the public service entry exam.

On the other hand, employment in the industrial sector suffered a significant slowdown in 2019, with a growth of 0.8% compared with 1.6% in 2018 - although this growth rate still exceeds the average of 0.2% between 1998 and 2018, according to Statec.