Labour market forecast: Stronger employment growth next year

The growth of employment has been slow in 2017, despite robust economic growth early in the year. Employment is forecast to grow faster in 2018.

According to the new labour market forecast, the number of employed people will grow by approximately 15,000 in 2017, compared to 11,000 in 2016. The number of people employed is forecast to grow by about 25,000 in 2018.

The employment rate has been growing slowly. It is forecast to be 69.3 per cent this year and 70.2 percent next year.

“Employment will grow as the economic growth picks up. Other factors contributing to employment growth are the shrinking working age population and their more active participation in the labour market. After a long recession, more and more people are becoming active jobseekers,” says Ministerial Adviser Johanna Alatalo.

Employment has begun to edge up slightly in industry. While strong employment is forecast for the construction sector, labour shortages could hold back the growth. The service sector as a whole is experiencing slow employment growth, although there are considerable variations between service branches.

Drop in the unemployment rate and number of unemployed jobseekers

The number of unemployed persons and the unemployment rate, which are measured in the Statistics Finland’s Labour Force Survey, have lately decreased slower than expected. The unemployment rate is forecast to be 8.6 per cent in 2017. Unemployment is expected to decrease faster the next year, when the unemployment rate is forecast to be 7.9 per cent.

The Employment Service Statistics of the Ministry of Economic Affairs and Employment show that the number of unemployed jobseekers has dropped exceptionally fast in 2017. The number of unemployed jobseekers has decreased faster than the number of people receiving unemployment-related benefits, the statistics show. This is explained by the policy adopted at the start of 2017 to step up the interviews of unemployed jobseekers. The Employment Service Statistics are now more accurate, as people who are not in fact unemployed jobseekers have been removed from the statistics.

“The effect of the more accurate statistics will not last long, and our forecast indicates that the decrease in the number of unemployed jobseekers will die down in the months to come. The employment growth means that the number of unemployed people will continue to decrease, although slower than at present”, says Senior Specialist Erno Mähönen.

Table: Number of unemployed jobseekers in the Employment Service Statistics according the labour market forecast

The short-term labour market forecast of the Ministry of Economic Affairs and Employment is based on a statistical time-series analysis that makes use of economic indicators, labour market statistics and policy information, as well as the Ministry of Finance’s GDP forecast and the demographic forecasts of Statistics Finland. The short-term labour market forecast is published twice a year.

Short-term labour market forecast of the Ministry of Economic Affairs and Employment, autumn 2017

Inquiries:
Johanna Alatalo, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 50 396 0324
Erno Mähönen, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 50 460 0066