Unemployment growth is about to peak and long-term unemployment is projected to increase throughout the year, according to this spring’s short-term labour market forecast published by the Ministry of Economic Affairs and Employment on Wednesday.
Weak economic development is reflected in the declining demand for labour. The number of open vacancies has fallen by more than half since the end of the coronavirus crisis.
The employment rate is expected to decline this year, but the number of employed people will not begin to fall because of strong immigration.
Due to the favourable economic trend and immigration, the number of employed persons will grow by 16,000 in 2025, and by another 29,000 in 2026.
The employment rate of the working-age population (15-64-year-olds) will shrink by 0.6 percentage points to 73.0 per cent this year and decrease further by 0.1 percentage points in 2025.
However, the employment rate will grow by 0.3 percentage points in 2026 to reach 73.3 per cent.
The unemployment rate is expected to increase by 0.5 percentage points this year. The unemployment rate is projected to hover around 7.7 per cent this year, fall to 7.5 per cent next year and to 7.1 per cent in 2026.
In 2024, the average number of unemployed jobseekers is estimated to be 277,000, which is 17,000 more than in 2023. Their number is expected to decrease to 269,000 in 2025, and to 267,000 in 2026.
The number of people unemployed in the long term will reach its peak towards the end of 2024, after which long-term unemployment will start to decline slowly.
It is expected that there will be 93,000 long-term unemployed people in 2024, and that their number will decrease to 91,000 in the following year and to 88,000 in 2026.
The economic downturn has been most visible in the construction sector, where employment has fallen since the beginning of 2023 and is now at its lowest point in 25 years.
According to the labour market forecast, nearly 15,000 more jobs will be lost in the construction sector this year, compared with last year. The situation will begin to improve towards the end of 2025, with the positive trend expected to continue in 2026.
To adapt to the downturn, the manufacturing sector has introduced large-scale lay-offs, which has helped to save jobs. Trends that will boost employment in manufacturing are also visible. The risk of fluctuations in the energy prices has decreased, but it is still significantly higher than before Russia’s invasion of Ukraine. The labour market forecast shows that the number of people employed in manufacturing in 2024 will fall by only a few thousand from 2023.
Modest employment growth can be detected in manufacturing already in the coming years.
The short-term labour market forecast of the Ministry of Economic Affairs and Employment is based on a statistical time-series analysis. It makes use of Statistics Finland’s Labour Force Survey, unemployment statistics, national accounts statistics, demographic statistics and the Ministry of Finance’s economic forecast. The forecast is published twice a year.
Source: www.dailyfinland.fi
It’s concerning to see the projected decline in the employment rate, especially with the increase in long-term unemployment. The government should focus on creating strategies to generate more job opportunities to support the working-age population.
As a working mother, I find the projected decline in the employment rate concerning. It’s worrying to see that long-term unemployment is expected to increase. I hope that government intervention and support programs can help mitigate the impact on job seekers in the coming years.
I believe the projected increase in unemployment rates is alarming. It’s concerning to see the labour market forecast indicating a decline in the employment rate. Hopefully, measures will be taken to address this issue and support those who may be affected by long-term unemployment.
I believe the projections in this article are concerning, especially the expected increase in long-term unemployment. It’s disheartening to see the employment rate declining, but the slight growth in employed persons due to immigration provides some hope for the future job market.