Employment to rise by yearend but long-term unemployment to grow

Employment is expected to begin growing by the end of 2025, according to the forecast released by the Ministry of Economic Affairs and Employment on Friday.

The government forecast, however, said that tong-term unemployment will continue to grow this year and next, but it is projected to begin falling towards the end of 2027.

The average employment rate of the working-age population (15–64-year-olds) is forecast to reach 71.4 per cent in 2025. The rate is projected to rise to 71.7 per cent next year, with growth accelerating to 72.3 per cent in 2027.

The unemployment rate is projected to average 9.5 per cent this year, falling to 9.3 per cent next year and to 8.8 per cent in 2027.

The number of long-term unemployed people is forecast to average 125,000 this year, increase to 140,000 next year and reach 142,000 in 2027.

This rise is partly explained by fewer unemployed jobseekers being registered with employment-promoting services.

According to the forecast, labour force growth will be driven especially by immigration and increased employment among older workers.

Although immigration is expected to decrease compared to recent years, labour force participation among those already settled in Finland remains high and is forecast to increase throughout the period. Labour force participation refers to the share of the working-age population who are either employed or unemployed.

The number of unemployed jobseekers registered with employment services is expected to fall next year.

However, this trend will appear in the statistics with a delay, as an estimated 16,000 people currently receiving social assistance will be reclassified as unemployed jobseekers next year due to changes in social security rules.

According to the forecast, the number of unemployed jobseekers will average 321,000 this year, rise to 328,000 next year and fall to 322,000 in 2027.

Unemployment has already begun to fall in many regions, especially in Northern Finland. In contrast, the number of unemployed jobseekers in Uusimaa is expected to continue rising until 2027, longer than in the other regions.

The recovery in employment will begin in industry, driven by exports and investment.

Employment is already increasing in logistics. Employment in expert services is expected to continue growing, except in architecture and engineering, where job prospects depend on stronger growth in the construction sector anticipated in 2027.

Cultural and leisure services form the other key area of employment growth, with strong increases in employment expected to continue throughout the forecast period.

Difficulties in public finances will slow the recovery of employment in publicly funded services.

The Ministry of Economic Affairs and Employment produces a short-term labour market forecast twice a year. It is based on a statistical time-series analysis. It makes use of Statistics Finland’s Labour Force Survey, Employment Service Statistics, national account statistics, demographic statistics and forecast, the Finnish Immigration Service’s statistics, and the Ministry of Finance’s economic forecast.