According to seasonally adjusted figures from the Icelandic Labour Force Survey, 17,000 individuals were unemployed in March 2021, or 8.3% of the labour force. The seasonally adjusted activity rate was 78.1% and seasonally adjusted employment rate 71.8%. Compared with February 2021 the seasonally adjusted employment rate decreased by 0.3 percentage points between months and the seasonally adjusted unemployment rate increased by 1.9 percentage points. Over the last 6 months, the trend of the employment rate decreased by 0.3 percentage points and the trend of the unemployment rate increased by 0.4 percentage points.
Based on unadjusted measures, the number of 16-74 year olds active on the labour market was estimated to be 202,700 (±6,700) in March 2021, which is equivalent to an activity rate of 77.0% (±2.5). Of active individuals, the number of employed persons was estimated to be 186,200 (±4,900) and 16,700 (±3,400) were estimated to be unemployed and looking for a job. The employment rate was estimated to be 70.8% (±2.6) and the unemployment rate 8.2% (±1.7). Comparison with March 2020 shows that the number of unemployed individuals increased by 11,200 between years, or by 5.4 percentage points. The employment rate decreased by 2.6 percentage points while the activity rate increased by 1.4 percentage points between years. Although a fair increase can be seen in the acitivity rate between years the rate is substantially lower now than in March 2017-2019 when the rate was between 79,3% and 83,0%.
Labour market slack
Considerable labour market slack was seen on the Icelandic labour market in March 2021. Results from the Icelandic Labour Force Survey indicate that around 37,600 individuals had an unmet need for employment which is equivalent to 17.4% of the labour force and potential labour force. Of those individuals, 44.3% were unemployed, 17.9% ready to work but not looking for a job, 16.2% looking but not ready to work and 21.6% employed but wanted to work more. Comparison with March 2020 shows that labour market slack has increased by 7.2 percentage points between years. Comparable labour market figures to March 2021 were last seen in October 2020.
Average working hours were 32.8 in March
Employed individuals were estimated to work 32.8 (±1.1) hours per week on average in March 2021. It is, however, important to keep in mind the changes made to the measurements of weekly working hours in the Icelandic Labour Force Survey at the beginning of 2021. Currently, planned meal breaks and absence due to personal errands are not counted as working hours. As a result, measured working hours are expected to decrease. Results from the first three months of using the new measure suggest that the new working hour measurement is on average 1.5 hours lower than the older measure.
About the data
The Labour Force Survey for March 2021 covers five weeks, from 1 March through 4 April 2021. The sample consisted of 1,904 individuals, 16-74 years old and domiciled in Iceland. When those who were domiciled abroad or deceased had been excluded, the net sample consisted of 1,861 individuals. Usable answers were obtained from 1,202 individuals which corresponds to a 64.6% response rate.