Private formal employment would slow down to 3% in the remainder of 2023

Private formal employment in February 2023 grew 5%according to the Electronic Payroll (call me). The strong dynamism was driven by the catch up of the activities most affected by the pandemic (services: +6.9% and commerce: +4.8%) and the best performance in the sector agro-exporter (+5.2%), explains the Economic Studies Area of ​​Banco de Crédito del Perú (BCP).

They also contributed, although with less dynamism, manufacture (+3.3%) and mining (+1.6%), while there was a drop in construction (-8.8%).

However, in its weekly macroeconomic report the bank indicates that, For the remainder of the year, private formal employment is expected to slow down to 3%.

The result would obey exhaustion of the catch up of the sectors most affected by the pandemic, the expected drop in private investment and greater rigidity in labor legislation decreed by the previous administration. “In this context, presumably underemployment in Metropolitan Lima will continue above its pre-pandemic level,” the BCP indicates in its report.

Salary behavior

Nominal wages in the private formal sector grew 4.2% in February 2023, but in real terms, deflated by the national CPI, they fell 4.4%, posting 11 consecutive negative months. Thus, without considering seasonal effects, real salaries have shown a trend opposite to employment since mid-2021, mentions the BCP.

For their part, nominal wages in the formal and informal sector of Metropolitan Lima rebounded 12% in the period January/March-2023 (S/1,841) and, in real terms, deflated by the CPI of the capital, grew 3.1% . However, in real terms they are still far from their pre-pandemic level (-11% vs. Jan/Mar-19 and similar to the real level of 2011).

The salaries of dependent and independent workers grew at a similar rate, both in nominal (+12%) and real (+3%) terms, although they still maintain a noticeable gap in levels (dependent: S/2.007 vs. independent: S /1,546)