Employment in Luxembourg continues to grow, but the pace is slowing down

According to the latest data from the national statistics institute STATEC, the number of employees in Luxembourg continues to increase moderately. Growth in the fourth quarter of 2024 was 0.3 per cent year-on-year and 1 per cent on an annualised basis. This confirms that the economy remains generally resilient, despite signs of slowdown in some sectors.

The most notable expansion was in specialised and support services, where employment grew by 0.8% over the quarter and 1.8% over the year. The public sector also continues to be dynamic, with growth in this area of 1.1 per cent over the quarter and an impressive 4 per cent year-on-year. The number of employees in the central administration grew particularly strongly.

However, the overall positive background is overshadowed by the situation in the construction industry. Over the last 12 months, employment in this sector fell by 4.3 per cent, the sharpest decline among all sectors. The largest losses were in the residential and non-residential construction segment. This may signal a slowdown in investment activity in construction, lower demand for housing and the effects of high inflation and lending rates.

The balance between residents and cross-border travellers is also interesting. In the fourth quarter of 2024, employment growth among both groups was the same 0.3 per cent. However, the number of workers coming from Germany and Belgium declined over the year, by 0.3 per cent and 0.2 per cent respectively. This may indicate both a saturation of the labour market and a decline in the competitiveness of certain sectors vis-à-vis the border countries.

It is important to realise that the calculation methodology focuses on those who actually work in Luxembourg territory, regardless of nationality and form of employment. One worker is counted as one unit - regardless of whether he or she works full-time or on several part-time jobs. International employees and residents working outside the country are not included in the statistics.

Thus, the Luxembourg labour market continues to show stability, but growth is becoming less pronounced. Particularly worrying is the contraction in construction, a sector that is traditionally sensitive to economic downturns. If the trend continues, this could be one of the first signals of an approaching cooling phase in the country's economy.