Business outlooks are now far more subdued

However, the generally positive economic trend continues – recruitment is a serious problem.

According to the Confederation of Finnish Industries’ Business Tendency Survey carried out in October, Finnish companies felt that the strong economic trend had continued during the late summer and early autumn. The current economy is described as far more favourable than usual, especially by manufacturing companies. The situation remained good in construction and services. The growth in production and sales has been rather rapid and the number of personnel has been increased. Recruitment difficulties have worsened.

Expectations regarding the trend in the near future are now less positive, especially in construction. However, in manufacturing and the service sectors, the outlook remained unchanged, whereas in construction the situation is expected to weaken rather generally. The general business outlook balance indicator fell to -4 in manufacturing (+13 in July). The business outlook indicator for construction declined to -33 (-10 in July). The latest general business outlook balance indicator for the service sectors was +3 (+5 in July).

Production and sales outlooks still favourable

The production and sales volumes of manufacturing and service companies have rapidly increased in recent months, and in manufacturing the trend in orders has been favourable. Growth remained slow in construction. Production is expected to keep growing over the coming months in manufacturing and services, while in construction it is expected to remain at the current level.

The order backlog in manufacturing was still clearly better than usual. In construction it declined slightly but was close to the average. Production capacity utilisation in manufacturing is rather good, as in October 88% of companies estimated that their capacity was fully utilised (81% in July).

The size of the labour force grew by three quarters in all sectors. Slightly less growth in the number of employees is expected for the remainder of the year.

Recruitment difficult have continued to worsen. Out of all business respondents, 31% saw the availability of professional labour as an obstacle to growth in October (28% in July), with more than half of construction companies reporting recruitment difficulties. Meanwhile, about a fifth of all companies described demand as being weak. In the coming months, profitability is expected to increase slightly in manufacturing and services but to remain the same in construction.

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.