Employers fear bankruptcy, lack of protective equipment: EK

As many as one-fifth of employers fear bankruptcy during the situation of the coronavirus outbreak in the country, according to a survey of Confederation of Finnish Industries (EK).

The second survey of EK released on Saturday also said that inadequate protective supplies and equipment for workers was also one of the worries highlighted in the survey.

About 65% of companies using protective equipment are concerned about the availability of respirators, gloves, protective clothing and other equipment.

“The financial distress of employers has deepened rapidly. Layoffs are on the rise, but redundancies are regarded the last option even in times of crisis. The unfortunate conclusion of the business survey is, however, that we may end up with unemployment and bankruptcy statistics, which are even more severe than those during Finland’s recession of the 1990,” said Director General of EK Jyri Häkämies.

According to the survey, companies of all sizes are increasingly negatively affected by the corona crisis. About 63% believe that corona crisis will weaken their company a lot or very much.

The corresponding figure was 40 percent in the previous EK survey two weeks ago.

The share of those whose business is severely weakened by the corona crisis was 42%, more than double what the figure was two weeks ago (17%). The service sector is the hardest hit, and so far, the construction industry has survived best.

About 37% of the companies had already made lay-offs and 5% had made people redundant. In the coming weeks, 24% of businesses are likely to carry out lay-offs and 12% are likely to carry out redundancies.

About 18% of companies are in danger of going bankrupt as a result of the corona crisis. If these estimates would materialise, the number of bankruptcies would be significantly higher than during Finland’s recession of the 1990s. The number of bankruptcies will in any case multiply as a result of the corona crisis.

About 54% believe that measures already taken by the Finnish government have made things easier for the company. Less than one fifth did not see any effect. The responses were most critical in micro-enterprises.

In terms of government measures, Finnish businesses are looking for direct financial support; loan repayments alone are not enough.

It is essential to consider the viability of the company and its impact on employment when granting the aid. The health of citizens and workers is paramount, but the economic downturn also challenges the health and sustainability of society.

A total of 1,873 entrepreneurs and business leaders, who all are employers, answered EK’s survey conducted on March 30 to March 31.