Unemployment to peak in first months of 2024

The Estonian Unemployment Insurance Fund (Töötukassa) office on Tartu's Vaksali tänav.
The Estonian Unemployment Insurance Fund (Töötukassa) office on Tartu's Vaksali tänav. Source: Aili Vahtla/ERR

Unemployment is starting to rise in Estonia and is expected to peak in the first quarter of next year, the Unemployment Insurance Fund believes. The number of people out of work may rise by 5,000-6,000.

In October, the number was 50,300 and the unemployment rate to 7.5 percent.

"Unemployment usually rises in October, but this time it rose slightly more. While October usually sees just over 1,000 unemployed, this time it is just over 1,500," said Katrin Liivamets, head of the fund's employer services department.

The number of newly unemployed people was not very large, but it is proving difficult to find new jobs, Thursday's "Aktuaalne kaamera" reported.

"Nothing tragic has happened in terms of the labor market, but there is a lot of anxiety or anticipation on the part of employers, and employers tend to try to find solutions, to keep production going. [They are] waiting for things to get better," Liivamets said.

Martin Talts, a board member KMT Prefab, which makes prefabricated walls and roofs, said the economic situation has been difficult for more than six months. 

"To tell the truth, looking at the foreseeable future, it does not promise to get any easier. It varies from one manufacturer to another, but roughly speaking, most have few orders and the outlook is rather difficult," he told AK.

At the beginning of November, the unemployment rate rose again. 

"At present, we are still seeing a steady and consistent rise in unemployment. We ourselves expect unemployment to continue to rise in the first three months of next year," said Liivamets. 

Unemployment may increase by 5,000-6,000 in the coming months, she said.

The Bank of Estonia thinks the unemployment rate will remain below 10 percent.

"We expect unemployment to rise further in the near future. During the next year, we will already see the recovery of the economy, which will also be accompanied by the recovery of the labor market, admittedly a slow one," said the bank's economist Orsolya Soosaar.

KMT Prefab's Talts believes the situation will not improve.

"There have been few orders for some time. Specifically in our company, we will be busy until February maybe, and from then on it is unclear. At the same time, small and medium-sized things are also in the bidding and decision phase, the situation might be better in a few weeks, but it is not possible to say for sure today," he said.

The company is not making redundancies, but it has been a long time since any new staff members were hired.


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Editor: Barbara Oja, Helen Wright

Source: Aktuaalne kaamera

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