Employment grew fast at the start of the year
Economist at Eesti Pank
There were 5.1% more people in employment in the first quarter of this year than a year earlier, and participation in the labour market increased. There were more people in work than immediately before the pandemic started. The recovery was particularly strong in activity in the labour market among young people and those of retirement age, who had been pushed out of the labour market more during the pandemic.
The strong position of the labour market at the start of the year was shown by the data from the Tax and Customs Board, which show that the number declared as receiving a wage from January to March was 3.7% more than a year earlier. Employment in Estonia has increased from what it was before the pandemic in service sectors with higher wages than the average, such as information and communications, professional, scientific and technical activities, finance, education, and healthcare.
Growth in demand for labour is expected to slow moving forwards because of the blow to the economy delivered by Russia’s war in Ukraine. The effects of the war has so far only been visible in the employment expectations of companies in construction and manufacturing, which were more pessimistic in March and April than previously. The high level of uncertainty has also reduced to some degree the share of companies that see labour shortages as the worst problem they face. The impact of the war on corporate employment expectations has so far been much less than that during the early stage of the pandemic two years ago. The labour supply will be increased by refugees from the war in Ukraine arriving in Estonia. It is important for their successful integration into the Estonian labour market that they be able to apply for jobs in as many different sectors as possible and that they be able to make the best possible use of their skills and knowledge.
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