Steadily positive business outlook continues – recruitment difficulties increasingly common

According to the Business Tendency Survey carried out by the Confederation of Finnish Industries in October, the Finnish economy’s business outlooks improved during summer and autumn 2017. In manufacturing and construction, the current situation is described as generally stronger than average, and in the service sectors the outlook is also brighter at slightly above average.

The general outlook for Finnish businesses for the next six months has, for the most part, remained positive. The improving trend is expected to continue during the remainder of the year and the first half of next year. The general business outlook balance indicator strengthened to +18 (July +10) in manufacturing. The outlook level for construction declined to -2 (July +18), whereas in services it increased to +20 points (July +16).

Output will grow during the latter part of the year and early next year

The growth in companies’ output and sales was moderate in early autumn. There was a substantial increase in the number of new orders received by the manufacturing sector. In the coming months, growth is forecast to speed up somewhat in all main sectors, and the fairly rapid growth is expected to continue during the first quarter of 2018.

Order books are slightly stronger than average in manufacturing, and in construction they are close to normal. The capacity utilisation rate has remained rather high and in manufacturing, for example, capacity was fully utilised in 86% of the companies that responded (also 86% in July).

The number of employees has grown somewhat, especially in manufacturing and services. A moderate increase in the labour force is forecast for the rest of the year. Profitability is estimated to improve somewhat on the corresponding period of the previous year.

Recruitment difficulties are increasingly common, and in construction and services this was already the most common obstacle to operations. Of all business respondents, 23% were suffering from recruitment difficulties. Lack of capacity and financing difficulties were considered to be far smaller obstacles.

EK Business Tendency Survey

The Business Tendency Survey is published four times a year by the Confederation of Finnish Industries (EK). The survey has been carried out regularly since 1966. It is part of the European Commission’s Joint Harmonised EU Programme of Business and Consumer Surveys, which is partially funded by the EU. The survey concerns activity in Finland.

In October 2017, the Confederation of Finnish Industries asked businesses to evaluate their business outlook for the end of 2017 and the beginning of 2018. 1,270 companies employing more than 260,000 people in Finland replied to the survey.