EK Business Tendency Survey: Coming out of the trough, recovery moderate

According to the Confederation of Finnish Industries’ (EK) October Business Tendency Survey, Finnish companies have almost come out of the trough. The economic outlook remains weak, but sales have stopped contracting and the decline in profitability has slowed down.

The outlook for the upcoming months has continued to slowly improve. The business outlook indicator for the economy as a whole is at zero but in manufacturing, the indicator has already risen to +4.

“On the positive side, we are leaving the trough behind. However, companies expect the return to growth to be at most moderate and inconsistent. Overall, the economic outlook for the coming months is still lacklustre, and the number of employees, for example, is expected to fall slightly,” says Penna Urrila, Director, Chief Economist, at EK.

Production and sales have remained unchanged in recent months. Slight growth is forecast for the rest of the year, while somewhat stronger figures are expected for the first quarter of 2025. The situation in construction is clearly weaker than in the other main sectors and production is anticipated to continue to fall throughout the coming winter season.

The employment trend always follows the economic trend with a slight lag, but the decline in personnel numbers is also expected to slow down towards the end of the year.

“The business cycle for services companies has remained relatively stable even during the downturn, and no major changes are expected. The impetus of manufacturing is set to strengthen gradually over the coming months, but we will have to wait a little longer for construction to recover from its deep trough,” says Urrila.

Weak demand is currently hampering business growth across the board. Across all sectors, 53 per cent of respondents felt that demand was weak, although the situation in manufacturing seems to have already picked up slightly. Despite the trough, 12 per cent of companies reported having difficulties in recruiting skilled labour.

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 2024, the Confederation of Finnish Industries asked businesses to evaluate their business outlook for the second quarter of 2024. A total of 1,187 companies employing about 250,000 people in Finland responded to the survey.