Businesses resume amidst possibility, uncertainty

The coronavirus outbreak has left a devastating impact on the Finnish economy as it forced most of the businesses to close down.

However, sensing an improvement in the situation, the government has recently decided to lift the state of emergency gradually and reopen businesses, particularly restaurants and bars, from 1st June under some restrictive terms and conditions.

According to the findings of a survey conducted by the Finnish Chambers of Commerce, the coronavirus pandemic has affected 90.7 per cent of the companies in Finland, with their turnover plummeting by 78.2 per cent and around 45 per cent of them being forced to decrease the number of their employees, more than half of the companies in the responding to the survey estimated that they would have to further reduce their manpower in the next two months and 26.09 per cent of the businesses declared that they are facing the risk of going bankrupt in the future.

The Daily Finland talked to some business leaders to assess the state of the country’s businesses and commerce and to learn their opinions regarding ways of recovery.

Turku Chamber of Commerce CEO Kaisa Leiwo said, “Uncertainty is the most challenging issue that different businesses are facing now and it is hard to say that companies are going to experience a completely secure future. She said, “Although Finland is relaxing the restrictions in phases, we cannot fully anticipate the future behaviour of the virus and its subsequent impact on the economy.”

She said to compensate for the economic damage, consumer demand has to be increased and some actions like tax cuts, VAT reductions for restaurants, and investment in road and railway infrastructure can level the pass ahead.

“Turnover of hotels and other businesses in the tourism industry was nil in the past two months. Transportation systems, from taxies to buses and trucks, are also victims of this problem. Additionally, all shops at the border between Finland and Norway lost approximately 95 per cent of their usual turnover,” said Lapland Chamber of Commerce, President Timo Rautajoki.

He, however, said that big shopping centres like Prisma and K-City Markets did not go through such a challenging time; the turnover of food delivery services has also been normal.

“Interestingly, due to the doubled stay-at-home time, people have had more time to repair homes and lodges. Consequently, hardware stores have sold more,” said Rautajoki, adding that the situation of the forest industry in pulp production and cardboard has been stable, with the exception of printing paper production.

He looks at this issue from a different aspect and hopes tourism companies in Lapland would see brighter days in the summer, if a second wave of the coronavirus outbreak doesn’t take place.

“Due to its environmental characteristics, Lapland has great potential to attract many customers. Tourism companies in Lapland have already lost about 50-100 million euros of the EUR 14.1bn total turnover. If we do not have to g for lockdown again, despite all the complications in recent months, business will start to accelerate from the beginning of next week and we are looking forward to better days,” added the president of the Lapland Chamber of Commerce.

Helsinki Chamber of Commerce Director Markku Lahtinen said, “At the moment, the situation of businesses in the tourism industry, the restaurant, accommodation and event organizing businesses are more critical than in other sectors. On the other hand, the construction industry, a section of manufacturing businesses, retailing (food, daily needs), banking, tele-operators, logistics (goods) business, and branches intertwined with the security of supply chain have gone through a more stable period.”

He does not see this summer as a booming season for tourism businesses, since operators in this sector are too eager worried to bring things back to normal too fast after the easing of the restrictions. Probably, business-to-business events would be able to recover, adopting the situation and making benefits faster than the rest.

“Financial supports that can be given to fixed costs like rents and salaries, especially to SMEs would help them overcome parts of the difficulties. Besides, other fairly massive benefits and financing being considered by the state can accelerate the process of problem-solving, Lahtinen said, adding that some actions are required to take into consideration for dealing with instant cash crisis being faced by some companies.”