Finnish employment situation deteriorates amid economic downturn

By admin On Dec 8, 2023

Customer at the Helsinki Employment Service Center in the Pasila Employment Office. LEHTIKUVA

Finland is currently facing a challenging employment scenario, with the labor market showing signs of weakening compared to last year. According to Paavo Hurri, an economist at the Finnish Union of Professional Engineers, the positive trend in employment has halted, and the number of layoffs is expected to rise in the coming months.

Post-summer, the labor market has seen a noticeable decline.

Key indicators tracking labor demand and supply are showing negative changes compared to the same period last year and recent months. Additionally, the outlook for the coming months is subdued as the threat of recession looms.

Statistics Finland reports a reduction of over 30,000 in the number of employed individuals compared to October last year. The employment rate for individuals aged 20–64 was 77.4% in October, marking a 1.6 percentage point decrease.

Although there has been a decline in the employment rate for this age group from 78.5% to 78%, the trend has remained relatively flat. Hurri notes that while employment and unemployment rates can vary significantly on a monthly basis, these changes are more reflective of seasonal phenomena rather than indicative of economic trends. Adjusted trend series that account for seasonal and random variations offer a more accurate picture of long-term and cyclical developments.

Initially, the job market was strong in early autumn, but it has turned weaker towards the end of the year. This is evident in both the number of unemployed individuals and the number of job vacancies. The weakening economy is thus becoming increasingly visible in the labor market.

According to the Ministry of Economic Affairs and Employment’s job placement statistics, there has been an increase in both the total number of job seekers and unemployed job seekers compared to the same time last year. There were nearly 24,000 more unemployed job seekers than a year ago, with a notable rise in the number of individuals fully laid off. Several companies reported layoffs in the fall.

In October, there were over 10,000 more fully laid-off individuals than at the same time in 2022, increasing by 3,500 from September. The Ministry’s forecast anticipates a continued rise in layoffs over the winter.

Hurri concludes that there is currently no positive development in sight for the labor market. While economic forecasts suggest that the downturn may ease in the next year, this improvement is not expected to immediately reflect in the employment situation. This ongoing trend highlights the challenges facing the Finnish economy and the need for robust strategies to stabilize and improve employment rates.

Source: www.helsinkitimes.fi