Swiss expect gradual improvement in job market during 2021

By John Revill

ZURICH (Reuters) - The Swiss job market should recover gradually during 2021 after the coronavirus pandemic brought it to a standstill last year, the head of the government's labour department said on Friday.

Companies almost immediately stopped hiring last March after the first government restrictions, triggering a rise in unemployment throughout the year, Boris Zuercher said.

"The light at the end of the tunnel is now clear for many companies," said Zuercher, highlighting Switzerland's short-time work compensation scheme in preventing layoffs and maintaining the purchasing power of families.

"Short-time working has allowed companies to deal with the crisis and make plans for the future," he told a news conference in Bern. "It has massively and decisively helped to stabilise the employment market."

Some 168,000 companies applied last year for the scheme, affecting 1.3 million workers. The programme that covers a portion of wages for furloughed staff paid out 9.2 billion Swiss francs ($10.40 billion), a massive increase from the 27.5 million francs for 2019.

In December the jobless rate rose to 3.5%, its highest monthly rate for three years.

Zuercher said the December rise was largely down to seasonal factors such as builders not being able to work in cold winter conditions rather than the pandemic.

For 2021 the State Secretariat for Economic Affairs expects unemployment to gradually fall from December's level to an average rate of around 3.3%, with improvements coming in the second half of the year. Economic risks remained high, it said.

The government plans to extend next week its lockdown restrictions -- including closing all restaurants, cultural and recreational sites -- to the end of February to help curb the pandemic, which has infected around 475,000 people and killed more than 7,500 in the country of about 8.5 million.

($1 = 0.8846 Swiss francs)

(Reporting by John Revill; Editing by Gareth Jones)