Situation room report 2.12.2021 – latest developments in the labor market, households and firms

December 2, 2021

The Helsinki GSE situation room continues to publish reports based on up-to-date data every month. The reports follow the economy’s development from the labor market’s, households’ and/or firms’ perspectives.

The background information for the figures has been collected from the Statistics Finland’s registers.

Key findings

  • Labor earnings in October have developed positively from 2019 in each age group and in all municipalities.
  • Total monthly revenues increased in September. Nearly all selected municipalities and industries show a positive development.

Labor market

Labor market – earnings

The figure below shows monthly earnings in 2019–2021 based on the Incomes Register. The total monthly sum of real labor earnings has slightly decreased in October 2021 but remains on a higher level compared to the corresponding values in previous years.

When examining the earnings figures, please keep in mind that information is uploaded to the Incomes Register with varying degrees of lag, and the figures may be slightly updated later when new data becomes available. In practice, data older than one month can be considered almost final.

The figure below shows the year-on-year change in real and nominal labor earnings with respect to year 2019. In 2021 earnings seem to have increased adequately although consumer prices have also increased. For example, year-over-year inflation in October was 0.20% in 2020 and 3.20% in 2021. Data on inflation can be found on Statistics Finland’s website here.

The figure below compares industry-level earnings in October from 2019 to 2021. Earnings in public administration, manufacturing, expert services and health and social care appear to have increased the most in October 2021 compared to previous years. In majority of the industries, labor earnings in October are on or above the level of 2019.

Next, we examine the changes in earnings in October compared to the level of 2019 by age group. Labor earnings in seem to have increased in all of the age groups compared to 2019. Especially age groups 64+, 60-64 and 45-49 show a significant positive change in labor earnings in October.

The next two figures show the development of labor earnings in municipalities in October. The first figure shows the change in labor earnings in twenty largest municipalities. Labor earnings increased from 2019 in all of these municipalities, of which Joensuu and Tampere show the most significant change.

The second figure shows ten municipalities with the lowest and ten with the highest changes in labor earnings for 2021 from 2019 levels. Similarly, it seems that labor earnings have increased in October in all municipalities. Tornio had the largest increase in labor earnings with almost 12% change from October 2019.

Labor market – employment

Below, we present the daily amounts of employed in 2019 – 2021 and the change in employment relative to 2019. Here, a person is considered employed if they receive at least 1000 euros of wage income over a month.

In the latest months of 2021, the daily number of employed has stayed near the level of 2019 after having remained below it ever since April 2020. The fresh figure shows that employment in September has slightly exceeded the 2019 level. Compared to the level of 2020 the number of employed remains higher.

Below, we present the daily numbers of employed in 2019 – 2021 by income groups earning at least €3000 or €6000 a month. Compared to year 2019, the number of employed has grown proportionately more for higher income groups: the number grew more for people earning at least €3000 than €1000. The fresh data points show that the difference to 2019 employment in higher income groups remained remarkable in September.

The 4 figures below show the development of employment according to the 1000€ per month measure in selected 4 industries. Here there are clear differences to be found and most of the selected industries in fact show a decline in employment throughout the year – only Trade remains on employment levels higher than those of 2019.

Labor market – furloughs and layoffs

The figures below show the weekly new furlough and unemployment spells from 2019 to 2021, altogether and for selected industries. The amount of new spells increased substantially in the beginning of the corona crisis, but new entries into unemployment or furloughs have in general declined afterwards. During 2021 the number of new furlough spells has slowly declined to the level of 2019, while the number of new unemployment spells has fallen even below that of 2019. The fresh figure shows that the number of new spells has remained low during the last weeks.

Firms

Firms – revenue

The figures below show the monthly revenue of Finnish firms in aggregate level and in selected 4 main industries measured in amount of employees. The fresh figures show that the monthly total revenue has increased rather significantly, in September and remains above the level of 2019. The percentage change in revenue from September 2019 is around 12%. While the monthly revenue in most of the selected industries has increased and remains near or above the level of 2019, revenue in Hotels and restaurants industry has again declined in September and continues to lag below the level of 2019. Of the selected industries especially construction shows increase in revenue compared to 2019.

The figures below show the monthly total revenues in selected regions in years 2019-2021. Total revenue increased in all of the selected regions in September. In the regions of Uusimaa, Pirkanmaa and Lappi the total revenue also clearly exceeded the level of the years 2020 and 2019.

Firms – Entries and exits

The figure below shows the monthly number of entrant firms in Finland 2019 – 2021. Legal entries are firms that start their business in a legal sense, for example, acquire a company ID. Real entries are firms that start their economic activities. Information on real entries is interpreted from various data sources by Statistics Finland. Note that the figures may change as more data is gathered and time passes.

The fresh data points show that the number of entries in October has decreased and returned below the level of 2019 after showing signs of positive development in August and September.

The figure below shows the monthly number of firms that left the market in Finland. Legal exits are firms that terminated their business permanently in a legal sense. Real exits are firms that stopped their economic activities, but did not necessarily cease their business in a legal sense. Information on real exits is interpreted from various sources by Statistics Finland. Note that the data may update afterwards when more information is received. It appears that market exists increased rather sharply in October and exceeded the 2019 and 2020 levels in real exits.

Households

Households – Unemployment benefits

The figure below displays the number of applicants for Kela’s unemployment benefits from the beginning of the year in 2019 – 2021. The figure shows striking increases in applications in April and May 2020. In 2021, similar spikes in the number of applications are not observed. The number of applications in October seems to remain on a very low level after falling clearly below the levels of 2020 and 2019 in September.

Please note that these figures do not include the earnings-related unemployment allowance paid by unemployment funds. Additionally, the figures illustrate the numbers of new applications rather than all those collecting benefits of a given type.

  • Additional information about the Helsinki GSE Situation Room consisting of researchers from Helsinki GSE, University of Turku, VATT Institute of Economic Research and Statistics Finland:  https://www.helsinkigse.fi/research-group/covid-19/
  • Additional information about the report: Otto Toivanen, otto.toivanen [at] aalto.fi
  • Suggested citation in mediaCite Helsinki GSE Situation Room as the source with a link to www.helsinkigse.fi website.
  • Suggested citation in academic publications: please contact otto.toivanen [at] aalto.fi
  • Figures and data: https://www.helsinkigse.fi/korona-data/