The economic forecast for Finland is foggy, to say the least. There is uncertainty in the air.
Global trade is not growing, and this affects the manufacturing industry, in particular. The industry outlook is bleak – although it looks better in the United States than in Europe. The outlook for Germany and Sweden, our major trading partners, looks gloomy. And expectations are not high in Asia either. The outlook for the Finnish construction sector is especially grim. Construction planning is stalling, and unemployment rates and layoffs among architects are rising sharply. The same goes for engineers working in the sector.
Households’ views on their own economy have remained weak. Similarly, the expectations concerning Finland’s economic growth continue to be low.
But there are some positives. Employment was on the rise in September. The fall in unemployment rates looks like it may level off, but the growth of unemployment is still quite reasonable. Unfortunately, the hiring of new graduates seems to have slowed down.
With any luck, optimism among households will be boosted by the inflation starting to fall and real earnings hopefully starting to pick up once more. The rise in interest rates is gradually slowing down as well. This will hopefully make households more optimistic about the future and give them the courage to make major purchases, such as buying a new home.
This is supported by the Government’s bill to lower the transfer tax rate, which is a welcome move also in terms of increasing labour mobility. The Finnish Government could propose other measures as well to drive households’ confidence and keep the wheels of the economy turning.
Confidence could be boosted in both workplaces and homes by a balanced reform of the labour market, as explained by our Labour Market Director Teemu Hankamäki in an interview.
The article is the editorial of TEK Magazine 5/2023.
