The labour market in Cyprus continues to demonstrate positive momentum. According to new data from the Statistical Service, the unemployment rate on the island fell to 4% in the first quarter of 2026, compared to 5% a year earlier. This reflects the continued recovery of the economy and the growing number of available jobs.
The number of unemployed people has declined significantly over the past year. While more than 26,000 people were unemployed at the beginning of 2025, the figure fell to approximately 21,000 in the first quarter of 2026. Experts note that the current unemployment rate is among the lowest recorded in recent years and reflects the resilience of the Cypriot economy.
More People Are Working in Cyprus
At the same time, the number of employed residents continues to increase. Total employment has surpassed 510,000 people, compared to around 493,000 a year earlier. The employment rate has risen to 62.1%.
Particularly strong figures continue to be recorded among people aged 20 to 64. Employment within this age group has reached 81.5%.
Among men, the employment rate stands at approximately 86%, while among women it exceeds 77%. In addition, the number of older people remaining in work continues to grow. In the 55–64 age group, the employment rate has increased to nearly 71%.
Specialists note that many Cypriots are choosing to remain in employment for longer, partly due to the rising cost of living and increasing expenses related to housing and everyday necessities.
The Services Sector Remains Cyprus’s Largest Employer
As in previous years, the island’s economy remains heavily dependent on the services sector. More than 80% of all employed residents work in service-related industries.
Tourism, hospitality, real estate, financial services, transportation, and the IT industry continue to play a key role in Cyprus’s labour market.
The industrial sector provides around 16% of all jobs, while agriculture remains the smallest area of employment, accounting for less than 2% of workers.
In recent years, Cyprus has actively developed its technology sector and attracted international companies, contributing to the creation of new employment opportunities. Particularly strong growth has been observed in information technology, financial services, and digital business vacancies.
Youth Unemployment Remains a Challenge
Despite the overall positive figures, one trend continues to concern specialists. Youth unemployment remains on the rise. Among Cypriots aged 15 to 24, the unemployment rate increased to 13.1%, compared to 11.2% a year earlier.
The situation is particularly challenging among young men, where unemployment has approached 16%. Among young women, the figure remains lower at approximately 10.5%.
Economists attribute this situation to several factors. Young professionals often face a lack of work experience, intense competition, and difficulties securing their first job. In addition, many employers in Cyprus prefer candidates with practical skills and previous experience, making it harder for young people to enter the labour market.
Temporary Employment Is Becoming More Popular
Another noticeable trend is the growing number of temporary employment contracts. Nearly 15% of working residents in Cyprus are now employed under temporary contracts, a higher proportion than a year ago.
The number of people working part-time is also gradually increasing. This form of employment now accounts for almost 9% of the workforce.
Experts link these developments to the growing popularity of flexible working arrangements and changes in the labour market following the pandemic. Many companies have become more willing to adopt hybrid work models and short-term employment contracts.
Economists believe that Cyprus’s labour market could continue to strengthen in the coming months, supported by the growth of tourism, increasing foreign investment, and business expansion.
However, risks remain. These include the rising cost of living, shortages of qualified specialists in certain sectors, and ongoing global economic uncertainty. Against the backdrop of Cyprus’s rapidly developing economy, creating high-quality jobs for young professionals and improving wage levels remain among the key priorities for both the government and the business community.