The slowdown in economic growth has not reached the labour market
Economist at Eesti Pank
The labour market remained strong in the third quarter even though exports were weaker, industrial output volumes were down and employers had become more pessimistic. Employment was 3.4% higher than it was a year earlier, and unemployment was at 5.6%. Data from both the labour force survey and the wage declarations of the Tax and Customs Board showed employment continuing to increase.
It is hard to predict how the change in the economic climate will affect the competitiveness of Estonian companies, and so also employment. The more of the cost of producing a good or service that goes on electricity and gas, the more impact the energy crisis has in the branch of the economy concerned. The fall in the purchasing power of households combined with larger interest payments on loans could also lead to lower demand, primarily at producers of goods or services that are not essential. Slower economic growth is also expected to slow the growth in employment after some lag, and then send it into reverse.
A large number of refugees from the war in Ukraine had joined the permanent residents of Estonia in the labour market by the third quarter, but they are not yet reflected in the statistics of the labour force survey. Refugees had expanded the labour force in the Estonian labour market by around 2.2% by the end of October. Some 9000 refugees have already found employment in Estonia and 6000 are looking for a job through Töötukassa. They have so far been relatively successful at finding work, but as the economy slows and ever more refugees enter the labour market, it may become harder to find a job.
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