Coronavirus pandemic dulls economic prospects of regions

The coronavirus epidemic has weakened the economic and employment prospects in the regions of the country for more than a year, said the Ministry of Economic Affairs and Employment, referring to a review published on Monday.

The outlook, however, is now cautiously positive. The improved expectations are driven by the assumption of a swift rollout of COVID-19 vaccine, an improving epidemiological situation, and the lifting of restrictions.

The estimates are based on a review of the current situation and short-term prospects of the regions, and sub-regions, conducted in March–April 2021 and prepared by the ELY centres in collaboration with other regional developers.

After a difficult year, many sectors and companies, particularly the service sector, are facing major difficulties, and it can take a long time for them to recover from the crisis.

The COVID-19 restrictions and the decreased demand have had the most serious impact on personal services, tourism, accommodation and catering services, the cultural and event sectors, and passenger transport across the country.

The prospects for the event and cultural sectors look very uncertain this summer. The COVID-19 pandemic has had a major impact on the aviation sector, which dampens the outlook for the capital city region and Vantaa.

However, the lake region and the Turku archipelago, among others, are expected to benefit from a robust summer season driven by domestic tourism.

The outlook for industry is more optimistic, which is reflected in improved expectations in industry-based regions.

The technology industry has performed relatively well and the near-term outlook for the sector is positive.

The expansion of Valmet Automotive’s operations and additional recruitment have led to improved prospects for the Uusikaupunki and Salo regions.

In the Turku area, the pharmaceutical industry and the diagnostics sector are experiencing strong growth on the back of the coronavirus epidemic.

In the maritime industry, the order book of the Rauma shipyard extends to 2025 and new orders have further brightened the outlook.

Meanwhile, the current order book of the shipyard in Turku also extends to 2025 but the crisis in the cruise sector has weakened its future prospects. In Ostrobothnia, Central Finland, and Northern Savo, the positive expectations are largely based on the well-performing technology industry.

It is expected that long-term unemployment will continue to increase rapidly, which is a major concern for the regions.

Youth unemployment has also increased as a result of the coronavirus crisis and it has become increasingly difficult for new graduates to find work, especially in the sectors affected by COVID-19 restrictions.