The unemployment rate rose to 3.7% in November, with Suðurnes reporting the highest regional rate. The Directorate of Labour predicts unemployment will range between 3.8% and 4.0% in December.
An “expected” uptick
As noted in a new report by the Directorate of Labour, registered unemployment in Iceland in November was 3.7%, up from 3.4% in October. In comparison, the unemployment rate one year ago, in November 2023, stood at 3.4%.
On average, 7,604 individuals were unemployed in November, comprising 4,307 men and 3,297 women. The average number of unemployed individuals rose by 569 compared to October. (At the end of the month, 8,113 individuals were unemployed, including 4,549 men and 3,564 women.)
As noted by RÚV, this aligns with the Central Bank’s forecast, presented during its last interest rate decision, which projected a decline in job availability and a gradual rise in unemployment.
Highest unemployment rate in Suðurnes
The highest unemployment rate in November was recorded in Suðurnes in Southwest Iceland at 6.5%, an increase from 5.9% in October. The lowest rates were in Northwest Iceland at 1.2% and East Iceland at 1.7%.
As noted by RÚV, the unemployment rate is subject to seasonal fluctuations, typically lowest during the summer months and rising into the new year. Last year, unemployment increased from 2.8% in July to 3.4% in November. This year, the increase during the same period has been from 3.1% to 3.7%, also a 0.6% rise.
259 work permits issued to foreign nationals
In November 2024, the Directorate of Labor issued 259 work permits to foreign nationals for employment in Iceland, with 219 of these permits issued in the capital region. Additionally, 243 individuals were employed under recruitment subsidies within companies or institutions, while 12 individuals received innovation grants.
The Directorate of Labour predicts unemployment will range between 3.8% and 4.0% in December.
4,543 unemployed foreign job seekers
At the end of November, 4,543 foreign job seekers were unemployed, an increase of 494 from October. Foreign nationals accounted for 56% of those registered as unemployed at the end of the month.
As noted in a recent OECD report, immigrants in Iceland have the highest employment rate (83%) and labour force participation rate (89%) among OECD countries, with their participation rate surpassing that of native-born citizens.
The largest group of foreign job seekers were Polish nationals, totalling 1,969 individuals, or approximately 43% of all foreign nationals on the unemployment register. They were followed by job seekers from Lithuania, Romania, and Ukraine.
As recently reported by Vísir, the number of foreign nationals in Iceland has increased by 30,000, compared to an 11,000 increase in Icelanders over the past five years. This trend is largely attributed to strong demand for labour in Iceland, which has sustained economic growth in recent years. According to Statistics Iceland, foreign nationals accounted for 16.6% of Iceland’s population in January, 2024 – a lower percentage than previously estimated; Statistics Iceland recently improved its method for calculating population figures.
