EK Business Tendency Survey: Recovery was limited, outlook for the early year cautious
According to the Confederation of Finnish Industries’ (EK) January Business Tendency Survey, Finnish companies have passed the most challenging phase of the business cycle but recovery has been slight. The current economic conditions are still being described as weak in all the main sectors. Production and sales performance at the end of 2024 did not live up to the previous survey’s cautious expectations of a rise.
The economy is only expected to improve slowly in the coming months. The order backlog is slightly better than before, but demand is described as subdued and profitability is not expected to improve. The business outlook for the economy as a whole is close to zero.
“We have come out of the deepest trough, but end-of-year performance fell short of earlier expectations. It is still too early to talk about a clear return to growth, as companies are expecting only slow growth in their production and sales in the coming months,” says Penna Urrila, Director and Chief Economist at EK.
Contrary to expectations, production declined in manufacturing at the end of 2024. However, a slight rise is forecast for the coming months and a slight increase in the rate of growth in the second quarter. The situation in construction will continue to be clearly more difficult than in the other main sectors, but expectations are a little more stable than before.
“Manufacturing momentum has remained more sluggish than estimated in the previous Business Tendency Survey. The relatively flat business outlook for services companies continues. There are cautiously positive signs in the hard-hit construction sector, where the decline in production and labour is expected to gradually level out,” Urrila says.
Many companies are suffering from weak demand. As many as 55 per cent of all respondents considered demand to be weak. One in ten companies were 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 January 2025, the Confederation of Finnish Industries asked businesses to evaluate their business outlook for the fourth quarter of 2024 and expectations for the beginning of 2025. A total of 1,209 companies employing about 280,000 people in Finland responded to the survey.