Iceland Mag

7 Reykjavik

Iceland Mag

Economy

Too many jobs: Iceland needs at least 7,000 new foreign workers next couple of years

By Staff

  • Construction workers The construction industry is facing the most acute labour shortage. Photo/Vilhelm.

Icelandic employers will need to fill about half of all vacancies from abroad in 2017-2019. Economists at Arion bank expect that the economy will add 15,000 new jobs until 2019, while the labour pool is not expected to grow by more than 8,000 workers. The other 7,000 will have to come from abroad. 

Growth will slow, but remain high
An economist with Arion bank told the local news site Vísir that the projection is based on rather conservative expectations of economic growth and changes in labour participation and labour productivity. Even if the labour participation rate (which is currently 82.5%) goes up and unemployment (which is currently 3.2%) goes down Iceland will need to import workers to meet the demands of a growing economy.

The bank bases its estimates on the assumption that economic growth will slow down significantly, while still remaining strong. In 2016 Iceland's GDP grew by 7.2%. Arion expects the economy to grow 5.9% in 2017, 3% in 2018 and 2.9% in 2019. The US economy is estimated to have grown by 1.6% in 2016, and is projected to grow 2.1% this year.

All hands are already on deck
According to unemployment figures released by Statistics Iceland last week the unemployment rate is currently 3.2%, which is slightly higher than in February 2016 when it was 3.1%. The labour participation rate, however, has increased from 82.1% to 82.8%. In comparison the unemployment rate in the US was 4.7% in February and the labour participation rate was 63%.

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