Confidence turned lower in March

Business confidence in Finland turned downward in March. Confidence in construction improved, but indicators weakened in other sectors.

Manufacturing confidence indicator declined slightly

The manufacturing confidence indicator weakened slightly in March. The latest balance figure stands at -1, compared with +3 in the previous month. Confidence is close to its long-term average level (0 points).

Production expectations remain fairly positive, though somewhat more cautious than in February. Order books remain below average, as in the previous month. Finished goods inventories stayed close to normal levels. Spare capacity remains relatively high: in March, 61% of respondents reported operating at full capacity (compared with 57% in February).

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

Weak construction confidence turned upward

Construction confidence improved in the March survey. The confidence indicator strengthened to a balance of -15, up from -24 in February. Despite the improvement, confidence remains weaker than the long-term average (-9).

Construction companies’ assessments of order books have improved, although order volumes are still described as low. Employment expectations for the coming months remain cautious, and no increase in staffing levels is anticipated.

In February, confidence among Finnish construction companies was the third weakest among EU countries.

Services confidence indicator on a gentle decline

Confidence in private service sectors weakened in March. The latest reading of the confidence indicator is 0 points, compared with +3 in February. The long-term average of the series is +11, indicating that confidence is below average.

The business cycle is assessed to have weakened in recent months. Nevertheless, sales have continued to grow modestly, and growth is expected to continue in the coming months.

In February, services confidence in Finland was slightly below the EU average.

Retail trade confidence weakened

The retail trade confidence indicator declined in March, falling to a balance of -1 from +9 in the previous month. The long-term average of the indicator is -2.

Growth in retail sales remained slow, and growth expectations for the coming months are clearly more cautious than before. Inventories increased further and are now above average.

In February, Finland’s retail trade confidence indicator was still stronger than the EU average.