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Jobless rate edges lower as more find work in March

Nordea bank's chief economist argues that more targeted training is needed to bring the unemployment rate down further.

Te-toimiston ovi.
Heading into an employment office. Image: Roni Rekomaa / Lehtikuva

Finland's unemployment rate declined slightly last month to 8.2 percent, compared to 8.3 percent in February, says Statistics Finland. The number of people with jobs has risen by 37,000 in the past year.

Although more people were working, the nation’s employment rate remained steady in March, says Statistics Finland. The agency pegs the rate at 71.1 percent, the same as in February. The centre-right government has set a target of 72 percent employment before its legislative term ends next spring.

The number of people with jobs has nudged up to 2.476 million, up by 37,000 from a year ago, the central statistics office said on Tuesday. However the agency’s statisticians believe that the number of so-called ‘hidden unemployed,’ including those with part-time jobs who would like to have full-time positions, rose compared to 2017 after a period of decline.

Nordea urges more worker training

Meanwhile the chief economist of the Nordea financial group said on Tuesday that more must be done to remove bottlenecks in the labour force, adding that they are increasingly a drag on economic growth.

“The number of easily-employable people is already low, so there is an urgent need to reduce structural unemployment. Targeted training should be stepped up and incentive traps should be removed,” says Aki Kangasharju.

The bank predicts that earnings will rise by two percent annually this year and next, which Kangasharju says will outpace the growth in productivity.

“Finland’s productivity was growing quickly, but has now slowed as employment has improved. It is difficult to imagine that productivity will rise by more than one percent annually, even in the best scenarios,” says Kangasharju.

He warns that productivity could even decline, which could undermine overall economic growth.

Nordea is sticking with its earlier forecast of three percent growth this year and 2.5 percent in 2019. It expects inflation to remain low while domestic consumption rises.

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