Business Confidence Edges Up on Services-Led Growth

Finland’s business sector confidence improved slightly in May. The improvement was significant only in the cyclical assessments of service companies, while economic confidence in the other main industries remained broadly at the previous month’s levels.

Manufacturing confidence indicator edges up

Manufacturing confidence rose slightly in May. The latest balance figure for the indicator is +3, compared with a revised +2 in April. Confidence is slightly above its long-term average (0).

Output expectations for the coming months have strengthened. The order book weakened somewhat and is slightly below average. Stocks of finished goods declined. Capacity utilisation fell; in May, 62% of respondents reported operating at full capacity (64% in April).

In April, manufacturing confidence in Finland was stronger than the EU average.

Construction confidence eased slightly

Construction confidence eased marginally. The confidence indicator stood at -20 in May, compared with -19 in April. Confidence remains below its long-term average (-9).

Construction companies’ already low order book assessments declined slightly in May. Employment expectations for the coming months remained mildly negative.

In April, confidence among Finnish construction companies was weaker than the EU average.

Services confidence strengthened

Confidence in private service sectors improved in May. The latest reading is +4, up from 0 in April. Despite the improvement, confidence remains below its long-term average (+11).

Recent overall economic developments are described as somewhat subdued. However, sales growth has accelerated in recent months, and expectations for sales in the coming months are also rising.

In April, confidence among Finnish service companies was slightly below the EU average.

Retail trade shows slight improvement

Retail trade confidence improved slightly in May. The latest balance figure is +10, up from +9 in April. Confidence is above its long-term average (-2).

Retail sales increased in May, although expectations for growth in the coming months are somewhat more modest. Inventories declined to a normal level.

In May, retail trade confidence in Finland was clearly above the EU average.