Employment rate reached the highest level ever • In 2018, the employment rate increased even more and the unemployment rate dropped further.
• According to Swedbank’s forecast, labour market should remain tight this year, so wage growth will stay rapid.
Labour market remains tight
According to Statistics Estonia, labour market indicators improved further in 2018. The employment rate climbed to 68.1% and the unemployment rate dropped to 5.4% (4.4% in Q4). The unemployment rate was previously below 5% in 2007-2008.
Employment rose only among the part-time workers
In 2018, the number of employed persons grew by 6,000, mostly in the services’ sector (education, tourism, healthcare, entertainment). Despite employment increasing in the education and health sectors, total employment in the public sector remained at the same level as in 2017. Employment among the part-time workers increased and the employment of the full-time workers decreased. Due to the shortage of labour, it is easier to find a part-time job for persons who cannot or do not want to work full time.
Foreigners eased labour market’s tightness a bit
The shortage of labour was the main factor restricting business for a fifth of manufacturing and a quarter of services’ and construction companies in January 2019. The highest shortage was of machine operators, sellers, social and construction workers. Without foreign labour (20,000 on short-term visas + thousands of others), the shortage of labour would be even more acute, especially in the construction sector.
Wage pressure will persist
The number of job vacancies and the number of persons leaving on their own initiative remained high. Labour turnover was the highest in tourism and construction. Thus, wage pressure will persist. In 2019, we expect the employment rate to remain high and the unemployment rate to stay low. The average gross wage should grow by around 6% this year.
For more information about this report, please contact Ms. Liis Elmik, email@example.com, +372 888 7206.
This email is sent through the web-based distribution system of Swedbank Macro Research. As a subscriber you can change your settings regarding what publications you will receive by clicking “Change your settings”. You can also unsubscribe from this particular newsletter by clicking "Unsubscribe". Information on the Swedbank Principles of processing personal data can be found here.