Business outlook inches ahead in spring: EK

Business outlook for all main Finnish industries improved a little this spring, according to the Business Tendency Survey carried out by the Confederation of Finnish Industries (EK).

The survey conducted in April found the manufacturing business outlook balance indicator improved slightly to minus 8 compared to minus 11 in January, said a press release.

Similarly, the expectations for construction inched ahead in the spring, although the outlook balance indicator remained modest at minus 8 (compared to minus 19 in January). Expectations in the service sectors were cautious, as the outlook balance indicator was minus 4, which was minus 5 in January.

According to the survey findings, Finnish companies estimated that the positive economic trend continued in the first months of this year.

The current economic conditions were described as stronger than average. The business cycle remained quite favourable in all the main sectors during the spring. This trend is consistent with the economic growth that has taken place in Finland.

According to the survey, production and sales also grew early in the year, as did the labour force. The trend was positive in all the main sectors.

Production and sales are expected to grow moderately in all the main sectors in the first half of the year. The order backlog in manufacturing remained at its normal level. In construction, the order backlog has stayed above average.

Production capacity utilisation in manufacturing remains rather good, as in April 84% of the companies estimated that their capacity was fully utilised (86% in January). Expectations for the labour force have deteriorated in all sectors except services, where the number of personnel is forecast to grow in the summer months.

Uncertainty in the global economy is reflected in barriers to growth in production. Inadequate demand has become the key problem in both manufacturing and services. Of all business respondents, 28% singled out insufficient demand as the main barrier to growth in production and sales. Similarly, recruitment difficulties are still a major problem, especially in construction. Profitability is forecast to increase slightly, the exception being the construction sector, where it is expected to weaken slightly.

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.

In April 2019, the Confederation of Finnish Industries asked businesses to evaluate their business outlooks for the first half of 2019. A total of 1,192 companies employing nearly 250,000 people in Finland responded to the survey.