South Korea’s job growth slows to a three-year low

South Korea’s job market experienced its slowest growth in three years this March, according to data released by Statistics Korea. The slowdown is attributed to a high base effect from strong hiring in the same period last year and unfavourable weather conditions impacting the agricultural sector.

The number of employed people in South Korea rose by 173,000 year-on-year in March, marking the smallest increase since February 2021. On-year job growth, which peaked at 1.13 million in January 2022, has hovered around 200,000 to 300,000 jobs in recent months. However, the high number of jobs created in March 2023 (469,000) presented a challenging comparison point for this year.

The agricultural and fishing sector was particularly affected, losing a significant 50,000 jobs compared to last year. This marks the sharpest decline since March 2017. Conversely, the manufacturing industry defined the trend, adding 49,000 jobs for the fourth consecutive month. This growth is fuelled by rising exports, particularly in the semiconductor sector.

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The slowdown is further amplified by South Korea’s shrinking workforce. Due to low birth rates and an ageing population, the number of people aged 15-64 has been steadily decreasing. March 2024 saw the lowest level in recent years, with only 35.73 million people in this working-age group. This demographic shift impacted youth employment most significantly, with the 15-29 age bracket losing 131,000 jobs year-on-year.

Despite the slowdown, the Ministry of Economy and Finance remains optimistic about the job market’s overall stability due to the export-driven economic recovery. However, they acknowledged potential risks from weak domestic demand and declining construction orders. The government has expressed its commitment to closely monitor these risk factors and prioritise the creation of quality jobs, reported The Korea Times.