Strong economic growth forecast but short of labour worrying

23 Oct 2021, 00:56

  DF Report

Mika Lintilä. Press Release Photo by Ministry of Economic Affairs and Employment.

With the easing of the coronavirus crisis and lifting of restrictions, the economies and employment in the regions are experiencing strong growth, according to an economic outlook published on Friday.

Although the estimation showed that near-term expectations are positive across the country and demand for labour is high, the outlook, however, in all regions is dampened by concerns over the availability of skilled labour, said the Ministry of Economic Affairs and Employment in a press release referring to the estimates.

The estimates are based on a review of the current situation and short-term prospects in the regions and subregions, which was prepared by the ELY Centres together with other key regional developers. The estimates for the review were made in September.

“I am pleased to see that there is strong economic growth and faith in the future everywhere in Finland. The coronavirus crisis is gradually subsiding, including in the service sector,” said Minister of Economic Affairs Mika Lintilä.

“However, we must take the regions’ concerns over the availability of skilled labour seriously. The Government is working hard to improve the labour market matching of jobs with workers,” Lintilä added.

Industrial order books have developed well and exports are growing strongly. A number of major industrial investments are either under way or planned in Ostrobothnia, Satakunta, Southwest Finland, Central Finland and many other regions.

The battery industry is experiencing strong growth. Both major investments and closures of production plants are currently taking place within the forest industry. Construction is brisk in growth centres, mainly driven by housing construction and renovations.

The coronavirus pandemic has negatively affected the service sector in particular, including tourism, the accommodation and catering sector and the event industry. Demand for services has increased within domestic tourism and trade.

However, the future still seems uncertain. For example, the absence of Russian tourists puts pressure on companies in South Karelia and Kymenlaakso. While air traffic is slowly recovering, the passenger numbers at Helsinki-Vantaa Airport – an important employer in the capital area – are still only 25% of what they were before the coronavirus crisis.

Problems in the availability of skilled labour have continued throughout the coronavirus epidemic. As a result of the economic recovery, these problems have worsened and spread to more sectors and professions. At worst, problems with the availability of labour will dampen the growth prospects in the regions.

The number of unemployed people has decreased rapidly across the country. The growth in employment is largely due to a reduction in lay-offs and an increase in demand for labour.