According to the Business Tendency Survey carried out by the Confederation of Finnish Industries in October, Finnish companies estimated that the economic situation had remained challenging during the autumn. The gradual recovery of the economy has ended, and business outlooks have clearly deteriorated from the summer. As we head towards winter we are still in a situation of considerable uncertainty.
“The acceleration of the coronavirus in both Europe and Finland is already evident in the weakening of the service sectors again. The outlook for the service sector has deteriorated rapidly, as is the case throughout the business community. The situation is more challenging compared with the spring, as construction and manufacturing are now also facing problems,” says Sami Pakarinen, Chief Economic Policy Advisor at EK.
Business outlooks throughout the business community have declined to -31, whereas in July they were still on the rise at -11. Based on the outlook, the coronavirus crisis is not over yet. There are considerable differences between sectors and companies. In the midst of the challenging economic situation, there is also a slight flicker of hope.
“The situation in the manufacturing sector continues to be difficult, but we can see the hint of an improvement in the outlook. The big question is whether Finland’s export industry will be able to catch up with the growth that has begun in European manufacturing and how quickly this will happen,” Pakarinen says.
Orders are decreasing and lack of demand is affecting companies
Order backlogs in manufacturing and construction have declined to clearly below the normal level. Production and sales have continued to decline, and it is difficult to anticipate a clear recovery before the amount of work starts to increase. Of the responding companies, 43% felt that insufficient demand was a problem.
“News about Europe, in particular, is worrying and Finland, too, must be prepared for even worse. This means a willingness to provide support to companies in order to save jobs, to prevent an increase in bankruptcies and to allow more company-specific solutions. It is important that, especially in the sectors affected by the coronavirus, solutions are sought within the framework of collective agreements. This is the only way to secure the necessary growth in employment,” says Jyri Häkämies, Director General of EK.
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 2020, the Confederation of Finnish Industries asked businesses to evaluate their business outlook for the third quarter of 2020. 1,262 companies employing nearly 250,000 people in Finland responded to the survey.