Country sees bleak economic outlooks in regions

The economic and employment situation in the regions has deteriorated and near-term expectations in many regions are more negative than before, according to a report on Regional Development Prospects for autumn 2023 published on Thursday.

Development Prospects produced by the Centres for Economic Development, Transport and the Environment (ELY Centres) and other regional developers on the current situation and short-term prospects in the regions published on the occasion of Aluekehittämispäivät (Regional development day) in Lahti, said the Ministry of Economic Affairs and Employment in a press release.

However, the depressed economic trend is expected to be short-lived, with the outlook for the autumn of next year already looking brighter.

The outlook for business and industry has worsened in most regions, but the situation is brighter in Lapland.

Expectations of business and industry for the next few months are gloomier than in the spring. The situation has deteriorated in most regions.

The effects of Russia’s invasion of Ukraine are visible in many sectors. High interest rates and rising prices put pressure on consumption. In particular, the difficulties faced by the construction and forest industries and the adjustment measures in those sectors have regional impacts.

According to the publication, 34 sub-regional units expect a downward trend in business and industry, 27 anticipate it to remain at the current level and five envision an improvement.

In the sub-regional units of Rovaniemi and Fell Lapland (Tunturi-Lappi), positive expectations are mainly driven by the upcoming tourism season. The good situation in the mining industry is also reflected in the prospects.

However, the economic and employment situation is expected to improve over the year and estimates extending to autumn 2024 are already considerably more positive.

Demand for labour has fallen due to the weakening economy. In particular, the number of laid-off persons has increased, and the number of unemployed jobseekers is growing moderately.

However, the availability of skilled labour remains the most significant challenge in the labour market.

Unemployment is expected to rise in almost all sub-regional units over the next six months.

However, the growth in unemployment is estimated to be short-lived, as most sub-regional units anticipate a more positive trend in a year’s time.