Survey shows businesses in tougher financial situation

The new Yrittäjägallup survey of business owners shows that businesses’ financial situation has become tougher and threatens to become even more so.

Businesses saw their finances take a clear turn for the worse during the autumn. Now, 52% of SMEs consider their situation very good or quite good. In August, that figure was 58%.

In retail, one in five businesses said its situation was either quite bad or very bad. The survey showed 17% of industrial businesses and 15% of construction firms rated their situation as quite bad or very bad. The share of companies rating their situation as bad increased since the previous survey. In August, 19% of retail businesses considered their situation quite good or very good, alongside 13% in industry and 12% in construction.

“Many businesses and their owners are worried. The downward trend in the economy is strengthening. Concern about the future cuts investments and with time will be reflected in the job market,” Mikael Pentikäinen, CEO of Suomen Yrittäjät, the Finnish SME association, says.

Pentikäinen says that measures are now needed to strengthen companies’ and their owners’ confidence in the future.

“It’s of particular importance to find actions that can help construction firms over their ‘death valley’. Many of them are at risk of running out of working capital. Our decision makers need to wake up,” he says.

“A lot of people are waiting for the global situation to calm down. However, it’s hard to make an influence on that from Finland. That’s why all eyes are on our politicians. Business owners expect that the public finances to be balanced and the labour markets reformed, as the Government has promised,” Pentikäinen says.

A total of 1,300 SME representatives responded to the Yrittäjägallup survey at the start of November.

Bleaker future outlook

Companies’ future outlooks have also become bleaker. In August, 32% thought that their situations would improve. In November, that figure was down to 29%. In August, 17% expected their situation to get worse in future, a figure which has now risen to 24%.

“I hope the trade unions also see how grave the situation is. When companies’ outlook is bleak and getting bleaker, striking and making it harder for your employer to succeed at a difficult time is irresponsible. It’s shooting yourself in the foot and eating your own tomorrow’s bread,” Pentikäinen says.

The situation is getting bleaker, in particular, in industry (36% of companies in the sector) and construction (35%). The outlook is most positive in professional services.

The survey found that 62% had experienced higher costs due to inflation, but that only 37% said they had raised their prices. Because of inflation, 44% of respondents had seen their profitability suffer.

Of all companies, one in five said they had delayed or cancelled investments. In industry, 17% said accessing finance had become more difficult. Higher interest rates have hit industry and construction particularly hard.

The war in Ukraine continues to have an influence, even though its impact has levelled off slightly. Of respondents, 41% said energy prices had risen because of the war, and 34% said uncertainty had reduced orders.

Read the results in more detail here.

How the survey was conducted

A total of 1,301 representatives of SMEs responded to the survey, conducted by Veriana (formerly Kantar Public) on behalf of Suomen Yrittäjät.

The survey was conducted between 1 and 10 November 2023.

The confidence interval for the survey results is +/- 2.8 percentage points.

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