The recovery in business conditions among Finnish companies continued and strengthened during the early summer, although the current situation is still described as weaker than average, according to a Business Tendency Survey released on Monday.
The survey carried out in July by the Confederation of Finnish Industries (EK) showed that manufacturing output increased broadly, and output in construction also returned to growth from a low base, said EK in a press release.
In the services sector, sales continued to grow at a moderate pace.
The outlook for the business sector in the coming months has likewise improved across all main sectors of the economy. Output is expected to continue growing at a fairly strong pace throughout the remainder of the year, while the long-running decline in employment is forecast to give way to modest growth.
“The results of the Business Tendency Survey indicate that economic growth in Finland has strengthened and become more broad-based despite the considerable uncertainties facing the global economy. The short-term outlook is positive, and it is particularly encouraging that employment expectations have turned slightly positive after a long period of weakness,” said Penna Urrila, Director and Chief Economist of EK in the press release.
Alongside the strengthening recovery, however, the overall business conditions continue to be marked by considerable uncertainty.
Upward pressure on costs remains strong, although profitability is nevertheless expected to improve slightly in the coming months.
Although business conditions have already recovered somewhat, weak demand remains by far the greatest constraint on growth for Finnish companies, with 53 per cent of respondents still reporting that it is limiting their operations.
In manufacturing, however, shortages of labour and production capacity have also begun to become more common as the recovery has gathered pace.
“The situation in the Persian Gulf remains a major risk to global economic growth. Although hostilities have eased since the spring, tensions are becoming increasingly protracted, and there is still no clear prospect of lasting peace or a recovery in energy markets. Inflationary pressures remain persistent, and interest rates are expected to continue rising in the coming months. In addition, uncertainty surrounding trade policy and the continuing war in Ukraine are affecting businesses. It is now important to ensure that the operating environment remains as stable as possible in order to support the continuation of Finland’s economic recovery,” Urrila said.
The Business Tendency Survey is published four times a year by the EK. A total of 1,035 companies employing around 260,000 people in Finland responded to the survey in July.
- Finnish companies
- Business
- Weak
- Recovery
Source: www.dailyfinland.fi
