Regional development prospects: Economic growth is strong but foreseeing future developments has become increasingly difficult
The recovery from the coronavirus crisis was well under way until Russia’s attack on Ukraine created a new global crisis and fundamentally changed the outlook for the regions, according to a review on the current situation and short-term outlook for the regions published on 10 May 2022.
Regional Economic Prospects in Spring 2022 is a review of the current situation and short-term prospects in the regions. It was prepared by the Centres for Economic Development, Transport and the Environment (ELY Centres) together with other regional developers. According to the review, the short-term outlook for the regions is similar across the country. Even though the effects of the war will extend far into the future and influence the debate on the economy, the regions are still in many ways in a good development phase and benefit from an upward employment trend. However, the outlook has become gloomier.
Strong demand for labour continues with ongoing mismatch problems
In many regions, demand for labour has been record high, which has raised the employment rate. On the other hand, the shortage of skilled labour has worsened and it now affects more sectors and professions than before.
According to the review, the impacts of the Ukraine war on the labour market have so far been limited. As the war continues and economic growth slows down, the threat of lay-offs and dismissals is expected to increase in logistics, tourism, trade and industry, in particular. The demand for labour is also likely to fall, but according to the review, it is difficult to estimate by how much.