Finland’s labour force is shrinking as its economy struggles

Friday, March 1, 2024

It was reported that businesses indexed in the Ilmarinen Economic Index witnessed a reduction in their workforce by 2.6% in January compared to the same month the previous year, marking a continuation of employment challenges across Finland. This downturn was particularly pronounced in the staffing services, construction, and hospitality sectors, with the most significant reductions recorded in Eastern and Northern Finland.

The Ilmarinen Economic Index, which monitors over 60,000 companies employing roughly 500,000 workers, serves as a barometer for the Finnish economy’s health. Despite January’s figures showing a minor improvement from the 2.8% decline noted in December, they underscore persistent economic concerns.

Jouni Vatanen, a researcher for Ilmarinen, commented on the decline’s widespread nature, impacting nearly all sectors under observation. He pointed out that, despite an increase in industrial orders in December, Finland’s export value experienced a near-seven percent fall last year. Vatanen also highlighted ongoing political disputes over labor market reforms, which have led to widespread strikes, as a source of concern for the Finnish economy.

Nevertheless, Vatanen conveyed a sense of optimism regarding Finland’s economic future, citing Fitch Ratings’ recent decision to maintain Finland’s credit rating in the second-highest category. He attributed this optimism to the country’s substantial pension assets, which help offset risks related to its debt burden and aging population. Vatanen mentioned that Ilmarinen’s financial statement and investment returns would be disclosed on February 15.

The staffing services sector experienced the most significant drop at 13.2%, followed by construction at 10.0%, and hospitality at 3.2%. Other sectors like transportation, commerce, and industry also faced losses.

Vatanen elaborated on the construction sector’s plight, noting a significant rise in unemployment or layoffs among builders in January, surpassing figures from both the previous year and month. He indicated that the distress in the construction sector and its associated staffing services has been evident in the Economic Index since the prior year.

The reduction in workforce was a nationwide trend, with Eastern Finland facing the steepest decline at 4.5%, and the least impact observed in Southern Finland at 1.9%. Despite the overall downturn, the communication and information technology sector saw growth in some areas.

Since its inception in 2013, Ilmarinen’s Economic Index has offered a consistent gauge of the Finnish economy’s state by tracking changes in employee numbers year over year. The tourism sector, along with construction and hospitality, is also enduring hardships due to these economic challenges, adding another layer of concern for the country’s financial stability and future prospects.

« Back to Page

• Hyatt names Tammy Ng as the new VP of marketing APAC

• Radisson Hotel Group sees its strong H1 2023 growth

• Nomadix appoints wireless technology sales leader Carl Jefferys to Asia Pacific Region

• PCMA announces expanded leadership structure

• Sabre inaugurated new APAC headquarters