Labour market forecast: Employment to pick up in 2025
The expected recovery of the employment rate will be delayed by the labour market downturn in autumn 2024. Long-term unemployment is projected to increase until 2026.
The Ministry of Economic Affairs and Employment published its latest labour market forecast on 19 November 2024. The forecast extends until the end of 2026.
The labour market forecast uses Statistics Finland's new population projection, which indicates that immigration will rapidly expand the size of the working-age population in the next few years. This will also increase the number of people in employment. According to the labour market forecast, the number of employed people will grow by 14,000 in 2025 and by another 27,000 in 2026.
This strong growth in the working-age population combined with cyclical weakness will push down the employment rate in the coming years. The forecast suggests that the employment rate of the working-age population (15–64-year-olds) will fall by 1.4 percentage points to 72.2 per cent this year. A slight decline is also expected next year, but the employment rate is forecast to return to 72.2 per cent in 2026.
The unemployment rate is forecast to rise this year by 1.2 percentage points to 8.4 per cent. It is expected to rise again to 8.5 per cent next year but return to 8.4 per cent in 2026.
Pressures on the public sector to save money will offset the positive development in employment in healthcare and social welfare and in public administration. For private services, however, the outlook is brighter. Employment in the construction sector will recover slowly, and an upturn is not expected until the end of 2025.
Considerable increase in long-term unemployment expected
The number of unemployed jobseekers registered with employment services will continue to increase, but the growth is expected to halt next year. The number of long-term unemployed, however, is predicted to keep rising until the end of the current forecast in 2026.
The number of unemployed jobseekers this year is estimated at an average of 288,000, which is 28,000 more than in 2023. Their number is expected to rise to 302,000 in 2025 and then fall to 294,000 in 2026.
The number of long-term unemployed people is expected to reach 93,000 this year, increasing to 106,000 next year and to 112,000 in 2026.
Unlike in other regions, unemployment is on a particularly favourable trend in Lapland where the decrease in the number of unemployed jobseekers is expected to continue in the next few years.
Key forecast results:
| Year | 2024* | 2025* | 2026* |
|---|---|---|---|
| Employment rate 20–64-year-olds | 76,8 % | 76,8 % | 77,2 % |
| Employment rate 15–64-year-olds | 72,2 % | 72,0 % | 72,2 % |
| Employed people 15–74-year-olds | 2 607 000 | 2 621 000 | 2 648 000 |
| Unemployment rate | 8,4 % | 8,5 % | 8,4 % |
| Labour force participation rate | 68,6 % | 68,6 % | 68,9 % |
| Unemployed jobseekers | 288 000 | 302 000 | 294 000 |
| Long-term unemployed people | 96 000 | 106 000 | 112 000 |
| Young unemployed people | 32 000 | 35 000 | 34 000 |
What is the labour market forecast?
The short-term labour market forecast of the Ministry of Economic Affairs and Employment is based on a statistical time-series analysis. It makes use of Statistics Finland’s Labour Force Survey, unemployment statistics, national accounts statistics, demographic statistics and the Ministry of Finance’s economic forecast. The forecast is published twice a year.
Inquiries:
Liisa Larja, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 50 400 7352 (demand for labour, employment and sectors)
Minna Ylikännö, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 102 (supply of labour, population)
Erno Mähönen, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 262 (unemployment and regional forecasts)
Juho Peltonen, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 119 (immigration)