EK’s Director General Jyri Häkämies:
“The financial distress of employers has deepened rapidly. Layoffs are on the rise, but redundancies are regarded the last option even in times of crisis. The unfortunate conclusion of the business survey is, however, that we may end up with unemployment and bankruptcy statistics, which are even more severe than those during Finland’s recession of the 1990s.”
Business survey results summarised:
- Companies of all sizes are increasingly negatively affected by the corona crisis. 63% believe that corona crisis will weaken their company a lot or very much. The corresponding figure was 40 percent in the previous EK survey two weeks ago.
- The share of those whose business is severely weakened by the corona crisis was 42%, more than double what the figure was two weeks ago (17%). The service sector is the hardest hit, and so far, the construction industry has survived best.
- 37% of the companies had already made lay-offs and 5% had made people redundant. In the coming weeks, 24% of businesses are likely to carry out lay-offs and 12% are likely to carry out redundancies.
- 18% of companies are in danger of going bankrupt as a result of the corona crisis. If these estimates would materialise, the number of bankruptcies would be significantly higher than during Finland’s recession of the 1990s. The number of bankruptcies will in any case multiply as a result of the corona crisis.
- Around half of companies need respiratory masks, gloves or other protective equipment to operate their business. 65% of companies are worried about the availability of these supplies during the corona crisis. In addition to the health care sector, many other sectors, such as commerce, property management and the food industry, are concerned.
- 54% believe that measures already taken by the Finnish government have made things easier for the company. Less than one fifth did not see any effect. The responses were most critical in micro-enterprises.
- In terms of government measures, Finnish businesses are looking for direct financial support; loan repayments alone are not enough. It is essential to consider the viability of the company and its impact on employment when granting the aid. The health of citizens and workers is paramount, but the economic downturn also challenges the health and sustainability of society.
1,873 entrepreneurs and business leaders, who all are employers, answered EK’s survey. The reliability of the results is strengthened by the weighting factors and can be generalized as a guiding advice to concern the entire field of employers. The response time to the survey was 30-31 March.
EK, through its member federations, is currently screening companies that could begin manufacturing protective equipment such as masks and protective clothing.