THE RECOVERY of Finnish labour markets from the crisis set off by the coronavirus pandemic will begin in the latter part of next year, although at a fairly subdued rate, indicates the latest labour market forecast of the Ministry of Employment and the Economy.
There is, however, also a risk that the crisis will have a longer-term impact on labour markets, the ministry warned.
The forecast suggests that the employment rate will continue to decline for another year before returning to a growth trajectory in 2022. The rate is projected to stand at 71.6 per cent in 2022, well below the level prior to the crisis.
The unemployment rate is expected to climb to 8.2 per cent in 2021 before decreasing to 7.8 per cent in 2022. The increase is being mitigated by an increase in the number of people outside the labour force, in hidden unemployment and long-term unemployment, according to the Ministry of Employment and the Economy.
The increase in hidden unemployment is attributable to, for example, the widespread temporary lay-offs introduced due to the pandemic-induced crisis.
“It nonetheless does appear that the working-age population has, to some extent, already begun to return to the labour force and labour markets compared to the onset of the coronavirus crisis and the spring of 2020,” the forecast reads.
The number of temporarily laid off employees is expected to remain high at least until next summer, although another wave of temporary lay-offs is presently not on the horizon.
Long term unemployment, on the other hand, is forecast to increase sharply in the coming years as a result of the lengthening of periods of unemployment during the pandemic and the classification of job seekers laid off during the pandemic-interrupted spring as long-term unemployed next spring. The number of the long-term unemployed is expected to grow by 11,000 from last year to 75,000 in 2020 and further to 107,000 in 2021 and 113,000 in 2022.
Aleksi Teivainen – HT