In a significant shift for Hungary's labor market, the latest census data from 2022 reveals a robust increase in employment across the country.

With 4.7 million individuals employed, 96% of whom are within the active working ages of 15-61, Hungary's workforce is experiencing a profound evolution.

Almost 200,000 workers are now aged 65 and over, illustrating a demographic shift within the labor pool.

The employment rate among the active population nearly reached 73% in 2022, with a remarkable rise in employment percentages observed in 99% of municipalities between 2011 and 2022. Notably, regions that historically had labor reserves, such as Northeastern and Southwestern Hungary, showed significant employment growth, underscoring a catching-up momentum in lower employment areas during this period.

Job market analyst Dóra Erdélyi from the Oeconomus Economic Research Foundation highlights the ongoing importance of tapping into labor reserves in these regions, especially considering that an aging population could increasingly constrain production due to workforce shortages.

Regional Disparities

Despite overall national improvements, regional employment disparities remain pronounced.

The census data points to the highest employment rates in Hungary's capital and its metropolitan area, as well as in county-level cities and regions like Central and Western Transdanubia.

For instance, Komárom district reports a 78.3% employment rate, Mosonmagyaróvár 77.9%, and Győr 77.7%.

Conversely, the country's northeastern and southwestern areas, particularly small village regions, register the lowest employment figures.

Notably, Ózd district reports a 58.9% rate, Kunhegyes 58.2%, and Encs 57.4%.

Decreasing Unemployment

Concurrent with rising employment, Hungary has seen a substantial decrease in unemployment from 2011 to 2022. Unemployed numbers fell by 334,000, a decline of 59%, resulting in 237,000 unemployed individuals, making up 3.7% of the active population at the time of the census.

Erdélyi notes that high unemployment remains problematic in North Hungary, the Northern Great Plain, and Southern Transdanubia, especially in border areas and internal peripheral regions like the Tisza Lake vicinity.

Yet, 45% of municipalities report unemployment below the national average, with 55 locales observing no unemployment at all.

Sectoral Employment and Emerging Trends

Analyzing workforce structure shows more than two-thirds of employees are engaged in the service sector as of 2022. The industrial and construction sectors account for 1.3 million employees, or 28% of the workforce, concentrated in key industrial hubs such as Győr, Kecskemét, and the Hatvan-Jászberény area.

The service sector, employing about 3.2 million people or 68% of all workers, dominates particularly in Budapest and its vicinity, county-level cities, and tourist-heavy areas like Balaton, Gyula, and Hajdúszoboszló.

Meanwhile, agriculture sustains 175,000 employees, approximately 3.7% of the workforce, mainly in the Great Plain regions.

Emergence of Knowledge-Based Jobs

Technological advancements have shifted labor market demand in Hungary.

High-skilled jobs and low-cost, simpler roles have gained prominence, while demand for automatable tasks has waned.

From 2011 to 2022, there was a marked increase in roles requiring advanced expertise, and a rise in simple manual labor, whereas routine industrial, commercial, and service occupations saw a decline.

New industrial investments in the eastern and southern parts of the country are anticipated to further bolster employment.

Significant projects include CATL's battery plant near Debrecen, expected to commence operations in late 2025, with additional major investments from BMW and BYD also underway in Debrecen and Szeged, respectively.

However, Erdélyi points to ongoing regional differences.

These are attributed to mismatches in workforce supply and employer needs regarding qualifications, occupations, sectors, regional presence, or salary expectations.

Mobility barriers, such as financial hardships, housing issues, and family ties, also restrict labor mobility within the country.

In some areas, like Nógrád and Baranya counties, the decrease of public employment programs has not been sufficiently compensated by primary labor market demand.

Ultimately, the transition in Hungary's labor market is ongoing, driven by technological progress and the potential for further automation-induced changes.

Addressing regional disparities and effectively harnessing workforce reserves remain critical, particularly as the nation grapples with the challenges of an aging society.