Situation room report 4.11.2021 – latest developments in the labor market, households and firms

November 4, 2021

The Helsinki GSE situation room continues to publish reports based on up-to-date data monthly from now on. 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 September have developed positively from 2019 in each age group and in nearly all municipalities.
  • The monthly total revenue in Finland show a slight increase in August whereas the revenue in hotels and restaurants industry fall again below the level of 2019.

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 September 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 September was 0.20% in 2020 and 2.50% in 2021. In September, an increase relative to 2019 can be seen in real labor earnings as well. Data on inflation can be found on Statistics Finland’s website here.

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

Next, we examine the changes in earnings in September compared to the level of 2019 by age group. Labor earnings in September 2021 seem to have increased in all of the age groups compared to 2019. Especially in age groups 64+, 60-64 and 45-49 show a significant positive change in labor earnings in September.

The next two figures show the development of labor earnings in municipalities in September. The first figure shows the change in labor earnings in twenty largest municipalities. Labor earnings increased from 2019 in all of these municipalities.

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 September in all municipalities except in Uusikaupunki and Jämsä where labor earnings have decreased. Of all municipalities Tornio had the largest increase in labor earnings.

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 towards the end of September has decreased slightly below the 2019 level. Compared to the level of 2020 the number of employed remains higher yet the gap between the years has slightly diminshed in September.

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 remains remarkable in September. In turn, the difference in the number of employed between 2019 and 2020 was not as significant in higher income groups than for people earning at least €1000.

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, yet the difference to previous years appears to have decreased in September.

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 falls slightly below that of 2019.

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 from August show that the monthly total revenue has slightly increased and remains above the level of 2019. While the monthly revenue in most of the selected industries remains near the level of 2019 or above, revenue in Hotels and restaurants industry has declined in August and falls again below the level of 2019.

The figures below show the monthly total revenues in selected regions in years 2019-2021. Of these regions total revenue increased in Uusimaa and Pirkanmaa in August. In the region of Varsinais-Suomi total revenue continues on the 2019 level whereas the other selected regions remain above that of 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.

Entry figures indicate positive development in latest months compared to July levels. The fresh data points show that the number of entries in September exceeds clearly the level of 2019.

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 after showing signs of positive development in August 2021, market exists increased again in September and exceeded the 2019 and 2020 levels.

  • 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/