“Very low unemployment, dynamic growth, emigration and the fast development of the service sector have combined to create acute labour shortages in the CEE-6 region. If these are not resolved, we foresee limitations to GDP growth, perhaps a recession and a likely shadow over private investment in the region in the medium to long run. If fulfilled, this path has negative implications for the demand for commercial real estate in CEE into the next cycle,” says Mark Robinson, CEE Research Specialist at Colliers International.

Colliers outlined six possible solutions to this labour force riddle: the first is a return of the labour force from the west. Colliers reported on the possibility of workers returning to the CEE-6 countries on a net basis in its report published in July 2017. Secondly, immigration from the east, from the former USSR and elsewhere, for similar economic reasons, can boost the CEE-6 workforces. Thirdly, stepping up the quality of labour supplied in the region, through better education and training to improve productivity. On top of that, fourthly, increasing the working “activity rate” in the population aged 15-64 and perhaps those of retirement age. Less positively for the workforces, downward shifts in the demand for labour are possible. In the long run, fifthly, an automation of jobs and lower working hours in the week may do the job. And as noted, sixthly, an economic slowdown or a recession can act to reduce the demand for labour and resolve the riddle by itself.