According to the Confederation of Finnish Industries’ October Business Tendency Survey, the business cycle has continued to be favourable in the autumn. However, the most intense growth period is beginning to be over, as the business outlook indicator decreased from July.
“The most intense period of recovery from the coronavirus pandemic will soon be over because we had already passed the lowest point at this time last year. In this favourable business cycle, the availability of competent employees, an issue that was forgotten for a while, as well as higher costs and problems caused by global disruptions in supply, have become hindrances to growth. These factors are now undermining economic growth,” says Sami Pakarinen, Director of the Confederation of Finnish Industries.
“The business outlook for services and industry has become slightly weaker. In terms of services, the arrival of international tourists in Finland is a major factor. The Finnish tourism industry is lagging behind its competitors, as Finns are travelling abroad and the number of visitors in Finland is lower than before,” says Pakarinen. “In industry, inventories are non-existent, and the poor availability of materials is reflected everywhere. The outlook for construction has picked up, but the high demand for housing may be momentarily hampered by rentability challenges. Combined with the labour availability problem, which is intensifying in all sectors, this is a challenging equation in terms of continued growth,” says Pakarinen.
Now is the time to invest
Currently, the most important factors for Finland are increasing the vaccination rate and extending the validity of the COVID-19 passport if a decision is made to continue the restriction authorisations, as well as lifting travel restrictions.
“We need to act quickly, as the healthcare deficit keeps growing and the availability of vaccines is no longer a problem. We will need to catch up again, because we are lagging behind in this respect as well. Preparations should have been made in the spring to introduce the COVID-19 passport as an alternative to the restrictions, so that it could have been adopted earlier. It would also have encouraged people to get vaccinated,” says Jyri Häkämies, Director General of the Confederation of Finnish Industries.
Finland has developed a significant investment deficit in recent years. There is currently demand for investments worldwide, as capacity is running out and becoming outdated.
“This offers opportunities that Finland simply needs to seize. That will not be possible without quicker permit practices in terms of both investments and labour,” Häkämies points out.