Finland’s unemployment rate fell for a second consecutive month in July as students in search of temporary work left the labor force, while the country’s first recession since 1993 left the economy with fewer jobs.
The unemployment rate, which isn’t adjusted for seasonal swings, fell to 7.7 percent from 9.1 percent in June, Helsinki- based Statistics Finland said on its Web site today. The rate was 5.2 percent in July last year.
“Layoffs and job cuts have mostly been in the industrial sector and will be slower to show in the rest of the economy,” said Raija Volk, a Helsinki-based chief economist at PTT Research Institute. Any improvement “will take about six months from when the economy has clearly bottomed out.”
Companies in the northern-most euro member, where exports account for a third of the economy, have been forced to cut thousands of jobs as the markets they sell to shrink. Helsinki- based Stora Enso Oyj (STERV), Europe’s biggest papermaker, said last week it will shutter a pulp mill and a sawmill in Finland, erasing as many as 1,100 jobs. Metso Oyj (MEO1V), the world’s largest manufacturer of rock crushers and paper machines, has said it plans to reduce 120 to 160 jobs.
There were 350,000 students in the workforce in July, or 45,000 fewer than a year earlier.
The seasonally adjusted unemployment rate rose to 8.9 percent in July from 8.7 percent the month before. The unemployment rate will rise to 9 percent this year and 10.5 percent in 2010, Helsinki-based OP-Pohjola Group forecast last week. The rate was 6.4 percent in 2008.
“We’ll see weaker numbers into the new year,” Volk at the PTT Research Institute said.
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