Finland's employment rate has continued to grow this year, according to data from Statistics Finland. But experts say the country has not yet addressed its long-term unemployment problem.
According to the number-crunching agency's Labour Force Survey, the number of unemployed people was 31,000 fewer in January 2022 compared to the same period last year, while the number of employed people was 88,000 more.
The employment rate trend was 73.5 percent and the unemployment rate trend was 7.0 percent in January.
The number of employed women increased by 60,000 and the number of employed men rose by 28,000 in the same month. The number of unemployed men stood at 109,000 and that of women 97,000.
According to Juho Keskinen, an economist with the credit institution Hypo, the figures indicate a sharp and rapid rise in the economy despite concerns about the impact of the Covid-19 crisis.
However, he said that the high rate of long-term unemployment is a worrying sign.
"The outlook is two-fold: the rise in fixed-term employment and part-time work accounts for the increase in employment, but also reflects the uncertainty that employers are facing in light of the drawn-out Covid-19 crisis," he said.
"Before coronavirus hit, Finland had about 62,000 people who had been unemployed for over a year, now the number is as high as 106,000. At the same time, there has been an exceptionally high rise in the number of job vacancies, but unemployed jobseekers are either unwilling or unable to take on these jobs," Keskinen said.
The economist said he thinks this supply-demand discrepancy in the job market will limit Finland's economic growth already this year.
Employment rate trend above pre-Covid levels
Jukka Appelqvist, Chief Economist at Finland's Chamber of Commerce, also attributed the high level of long-term unemployment to skills and job mismatch, that is, the inability to find the right person for the job.
"Long-term unemployment is declining at a snail's pace, which is a stark indicator of the skills mismatch in the labour market," he stated in a review.
According to Appelqvist, the latest employment statistics met expectations otherwise.
"Employment growth slowed down, as expected, in January, but the figures cannot be considered especially bad. The seemingly strong growth rate is not a surprise, as employment improved throughout the previous year and is currently significantly higher than a year ago."
He noted that before Covid, the trend of the employment rate went no higher than 72.7 percent, but the decline in unemployment is still slow.
"As anticipated, coronavirus restrictions created a strong headwind for employment growth since the beginning of the year, and layoffs were on the rise. However, we cannot call it a catastrophe, but a rather small reversal when compared to the number of lay-offs in earlier stages of the crisis. The [spread of the coronavirus variant] Omicron seems to have caused a temporary slowdown in the job market and employment continues to witness historic growth," Appelqvist added.