Business confidence declines in March

Business confidence declined slightly in March, according to the indicators released by the Confederation of Finnish Industries (EK) on Monday.

In manufacturing, confidence fell by six notches in March. The latest balance reading was minus 12, compared to minus 6 the previous month. The long-term average of the confidence in manufacturing is +1.

Production is expected to decrease in the coming months and order backlogs have continued to thin out.

The weakness in demand is reflected in the increase in stocks of finished products. At the same time, capacity in full use is only 60% of companies, which is a smaller share than last month.

In Finland, industrial confidence was clearly weaker than the EU average in February.

In March, construction confidence, however, rose four points from the previous month. The balance figure was minus 17, while in February the balance figure was minus 21. The long-term average is minus 6.

The order backlog improved from the previous month but is still well below the level considered normal. Expectations regarding the number of personnel in the construction sector continued to weaken.

Among the EU countries, confidence in construction was the second weakest in Finland in February.

Confidence in services rose to the balance figure of 5 in March. This was three points more than in February. The long-term average for the service sector is +12.

The economic picture has been negative in recent months. Nevertheless, sales have increased compared to previous months and sales expectations are still rising.

In Finland, confidence in services was clearly below the average for EU countries.

In retail, confidence rose to minus 10 in March. The balance figure was two points more than in the previous month, when the balance figure was minus 12. The long-term average is minus 1.

In retail, sales have decreased compared to previous months. By contrast, sales expectations for the coming months have turned to cautious growth. Inventories have decreased slightly from the previous month.

Retail confidence was lower than the EU average in February.