Divergence in Business Confidence

In July, economic confidence among companies declined across all major sectors, except for manufacturing.

Confidence in manufacturing on the rise in July

The confidence indicator for manufacturing rose to -6 in July, up from -9 in the June survey. However, sentiment remained slightly below the long-term average of 0.

Production expectations have improved, and output is expected to increase somewhat in the coming months. The order backlog remained clearly below average, while inventories of finished goods stayed at a normal level. There was still considerable unused production capacity, as only 55% of respondents reported full capacity utilization.

In Finland, manufacturing confidence in June was lower than the EU average.

Confidence in construction remains low

Construction sector confidence declined in July, with the confidence indicator staying at a low level. The latest balance figure stands at -37, down from -33 in June. Confidence is clearly below the long-term average of -9.

Order books in construction companies are significantly thinner than usual, and employment is expected to continue decreasing in the coming months.

In June, confidence among Finnish construction companies was the lowest among EU countries.

Confidence in services softened slightly

Confidence in private service sectors declined slightly in July. The latest balance figure for the confidence indicator is +1, down from +4 in the previous month. The long-term average for the indicator is +11.

The general economic outlook during the summer is considered to have remained fairly cautious. However, sales have been growing. Over the coming months, the volume of sales is expected to remain at its current level.

In June, confidence in the Finnish service sector was in line with the EU average.

Retail trade confidence declined slightly

Confidence in the retail trade sector dipped slightly in July following a strong rise in the spring. The latest balance figure for the indicator was +3, compared to +6 in June. The long-term average for the indicator is -2.

Retail sales growth paused in July. However, a modest increase in sales volume is expected in the coming months. Inventory levels fell slightly below the average.

In June, Finland’s retail confidence indicator was above the EU average.

Data