Employment growth will continue over the next few years, but at a slower pace than has been seen recently, according to a forecast by Finland's Ministry of Economic Affairs and Employment.

Although the labour market outlook is far from bright in many respects, the number of employed people is expected to increase slightly. The ministry's latest projections for this year and next pin the employment rate at 73.6 percent, showing a rise to 74 percent in 2024.

At the same time, the number of jobless people registered for public unemployment services will increase next year.

Prospects for increased employment rates are being hampered, above all, by the energy shortage and the decline in purchasing power.

Ukrainian refugees

The Ministry says that the Finnish labour market is also being affected by the integration of Ukrainian war refugees who will start to be included in the official employment and unemployment rate during the next year. There are currently around 30,000 Ukrainians of working age in Finland, but have yet to be added to employment statistics.

"The contribution to the workforce brought by Ukrainian refugees is needed. Now, our labour service and training systems will face a practical test of efficiency when delivering skilled workers to employers suffering from labour shortages," Ministry of Economic Affairs and Employment Undersecretary of State,Elina Pylkkänen, said in a statement issued on Wednesday.

She went on to point out that the share of the working-age population is lower in Finland than in other Nordic countries, although it is expected to increase. 

"The good news also includes the fact that the employment rates for the youngest and oldest age groups have risen by leaps and bounds over the past couple of years. However, there is still room for improvement, as there is still a way to go before reaching an 80 percent employment rate," she added.

The employment of older people, aged 65–74, has grown strongly in recent years and this growth is expected to continue. 

No dramatic change

A period of very strong employment growth seen recently is coming to an end, according to the ministry, and although the change is significant, it is not being characterised as dramatic. 

One of the reasons for the slowdown in employment development is that the growth of part-time work is predicted to decline in the next few years. Also, the number of unemployed job seekers is currently not decreasing. However, long-term unemployment is still falling for the time being.

The challenges related to labour availability may ease a bit, but they are not going away. The main increase in the labour force is expected to come through immigration. 

Ministry Senior SpecialistMinna Ylikännö told a press conference on Wednesday that at this stage, it is still difficult to estimate how many Ukrainians will remain in Finland and become part of the workforce. The current forecast assumes about 5,000 Ukrainians will settle down and work here. 

"Our country could still accommodate a much larger workforce and more working-age people, Ylikännö said.