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Survey: 1 in 5 SMEs in poor financial state
The bigger a company, the better its finances are, the Yrittäjägallup survey shows.
The recent Yrittäjägallup survey shows that the finances of one in five SMEs remain difficult. Businesses’ financial standing has remained almost the same since the start of the year.
Of respondents to the latest Yrittäjägallup survey, 48% consider their financial situation extremely or quite good. That proportion in March was 47%.
“SMEs reflect stronger purchasing power, slower inflation, interest-rate cuts and the positive impact of future tax cuts on purchasing power. However, the war in Ukraine and President Trump are causing uncertainty,” says Mikael Pentikäinen, CEO of Suomen Yrittäjät, the Finnish SME association.
Solo entrepreneurs in more difficulty
The bigger a company is, the better its finances are. Of solo entrepreneurs, 22% say they are a in a poor financial situation, whereas the corresponding figure for businesses employing over ten people is 15%.
The construction industry reports poor finances the most frequently (26%). In March, 23% of businesses in the construction industry reported poor finances. In retail, the proportion of businesses reporting poor finances has fallen from 26% in March to 19% in May.
1,351 SMEs responded to the Yrittäjägallup survey between 6 and 19 May. Of the respondents, 45% were solo entrepreneurs.
War in Ukraine and Trump cast shadows
The outlook for the next year has worsened somewhat, with 33% of respondents believing their situations will improve over the next year. In March, the corresponding figure was 36%. By contrast, 19% believe their situations will worsen. Pessimistic outlooks are most prevalent in the construction industry.
“Trump’s trade war and the war in Ukraine cast shadows over SMEs’ outlooks. Trade deals to calm the situation are necessary,” Pentikäinen says.
Industrial businesses report the most positive views: 42% of them think their situations will improve. In March, just 36% of industrial businesses had this optimistic outlook.
Among age groups, 18–39-year-olds reported the best outlooks.
“There’s justification for hope. Working-day adjusted output for January–March rose by 1.2% compared to a year ago, based on preliminary data,” Pentikäinen says.
“One positive risk is that the economy will grow faster than expected. That could happen if the trade war relents and particularly if a just peace is secured for Ukraine. The latter does not look like it’s going to happen very quickly,” Pentikäinen adds.
How the survey was conducted
The Yrittäjägallup entrepreneur survey was carried out by Veriana on behalf of Suomen Yrittäjät.
1,351 SMEs responded to the Yrittäjägallup survey between 6 and 19 May. The confidence interval for the results is +/- 2.7 percentage points.
You can read the results in more detail here.
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