The Statec communicated last week the number of salaried workers in Luxembourg at the end of 2024, namely 487.109 employees. A number that has only increased in 2024, with an increase evaluated at 1% by the Luxembourg Statistical Institute. Or a job market growth as we had not seen in Luxembourg since 2009, as explained by the IDEA Foundation in its annual opinion published a few days ago. Since the recession, which had accompanied the 2008-2009 financial crisis.
“We had already noticed a slowdown in 2023, but it accelerated in 2024,” says Ioana Pop, an economist at the Idea Foundation. “If employment still experiences growth in Luxembourg, it has therefore slowed down.” While it displayed an average increase of 2.9% per year between 2013 and 2023, it was limited to 2.1% in 2023, before diving at 1%.
For Ioana Pop, the reasons for this slowdown are essentially sectoral.
Thus, while between 2014 and 2019, the non -market sector contributed to the evolution of employment up to around twenty percent, its contribution in 2024 rose to 77.4% (or nearly 4,500 jobs). Suddenly, necessarily, the merchant sector has largely marked the step, with 22.6% of the jobs created (for a total of around 1,300 positions).
The “Construction, Finance and IT” trilogy down
“It is the construction branch, which represents almost 10% of employment in Luxembourg, which recorded the largest decrease, with a drop of 4.8%, or about 2,500 jobs compared to 2023” explains the economist.
Another (very) important branch having experienced slowed growth: the finance and insurance sector. “It weighs approximately 11% of the total job market and only recorded growth of 1.3% in 2024.”
A slowdown, which is however a continuation of a year 2023 which had already experienced a (small) stopping: we had gone from 3.5% in 2022 to a growth of 2.9% last year.
Ioana Pop, economist at the Idea Foundation. © PHOTO: D.R.
But what we especially note is the hole experienced by another sector increasingly crucial on the economic level: IT. An usually very dynamic market ( +3.5% of employment in 2022 and +3.9% in 2023) but which stagnates, or even displays a slight recession, in 2024 (-0.1%). “It still represents 4.5% of Luxembourg jobs” informs Ioana Pop.
The latter cannot help making the link with the latest lists published by ADEM concerning the shortage professions. Lists in which we found many professions related to this sector.
Increasingly graduate job seekers
We also imagine that there can be a link between the slowdowns noted in the commitments seen on the financial center and the IT sector and another data found in IDEA’s annual opinion: the sharp increase in job seekers with a higher diploma.
We know that artificial intelligence could redraw the labor market, but it is difficult to say today whether the slowdown we see could come from there or not.
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Ioana Pop
Economist at the Idea Foundation
Thus, if the number of job seekers with a lower secondary level level (+2.1%) or with a higher secondary diploma (+6.2%) increased in 2024, these increases remain much lower than 15.2%that we see in people in possession of a university degree (or equivalent).
A skills inadequacy
“A non-decency between, on the one hand, the skills of these graduates and, on the other, those sought by employers seems to be one of the reasons explaining this strong increase” confirms Ioana Pop.
But the latter also sees two other explanatory factors: “The fact that the share of the Luxembourg resident population with a higher diploma increased (to reach 45.5%) and a number of people currently seeking professional retraining.”
In the same vein, we also note that Luxembourg has a rate of activity of seniors (that is to say the 55-64 year olds) much lower than its European neighbors. This can be partly explained by a Luxembourg pension plan which we know is very generous, but also, once again, by a concern in terms of skills. “Those of many seniors having become obsolete in the face of changes noted on the job market,” explains Ioana Pop.
More than 20,000 inactive people wishing to work
Some 20,475 inactive (but wishing to work) were identified in 2024 in Luxembourg. A contingent that does not enter unemployment figures, but which brings together various people who can be training or be unfit for work because of their state of health. People who do not necessarily look actively a job, but who can constitute a pool of potential workers.
This inadequacy of skills is likely to worsen if it is not treated. More than ever, investing more in continuing education therefore appears to be a necessity, in order to adapt these skills to the needs of the market.
Artificial intelligence
What is more than the latter changes, Luxembourg always turning a little more towards digital and innovation. Sectors with high added value, but needing a highly qualified workforce in often pointed areas.
Luxembourg is not the only one to invest in these sectors and it is not the only European country to note a slowdown in its job market. “We know that artificial intelligence could redraw the labor market, but it is difficult to say today whether the slowdown we see could come from there or not. Many studies dealing with the AI incidence on the world of work tends to reveal contradictory results at the moment “slips Ioana Pop.
What appears more certain, however, is that “must be adapted to current changes, such as AI. Those who will not get there may not succeed in keeping their heads out of the water. ”
In the meantime, the Statec Table, on a timid resumption of the job market in 2025 (+1.4%), before a return to 2.2% in 2026. It remains to be seen if it will be verified …
