Business outlook for manufacturing and construction

Last updated 27/03/2019 - 09:03

Business outlooks have cooled

According to the Business Tendency Survey carried out by Confederation of Finnish Industries (EK) in January, business cycle expectations for the upcoming months have weakened in all the main industries, and the expectations are more careful than before. On the other hand, the current economic situation was described as stronger than average in the survey, and it has stayed positive in all the main industries. Production and sales increased at the end of the year and the number of employees kept growing in all the main industries.

The world economy prospects are more cautious than before, and the growth prognoses are corrected downward. In the financial markets, the maturing of the economic situation and the political insecurity have caused some swings.

Manufacturing and construction

The prospects for manufacturing and construction companies in Uusimaa in the coming months are slightly negative and they are prognosed to decrease during the start of the year. The newest business outlook balance indicator was -14 (-18 in October). The business outlook for the surveyed businesses in Uusimaa is close to the national average. Production increased slightly at the end of 2018 and production is estimated to increase even in the coming months. In January, 99 per cent of respondents were using their full capacity. The number of orders in hand was slightly higher than usual, and inventories of finished goods were slightly below the usual. The number of employees grew somewhat, and more workforce will likely be hired in the beginning of this year. In January, 26 per cent of respondents in Uusimaa had a problem with finding skilled workers. Profitability was slightly better compared to last year and will probably improve further in the beginning of this year.

The prospects for manufacturing businesses in the entire country have decreased somewhat since last autumn and the tendency survey indicator for manufacturing was -11 in January (-4 in October). However, the economic situation is still good for manufacturing companies and outlooks have continued as rather favourable even though the situation has weakened since last autumn. New orders received by manufacturing companies returned to their normal level in October–December. In January, 86 per cent of respondents were utilising their full capacity. Expectations for exports are still positive, even if the growth of export orders stopped and even dipped below the level that is considered normal. The number of employees continued to grow in October–December, but the growth is not expected to continue in the coming months.

The economic situation has continued as good for construction companies in the entire country, and the current situation is still described as stronger than average. The order book has risen back to above the normal level, but the number of unsold homes is rising. Production experienced a mild growth at the end of the year and there were increases in the number of employees. However, the general prospects for construction are weak, and the economic situation is estimated to weaken by spring. The tendency survey indicator for construction was -19 in January (-33 in October). Production capacity was almost fully utilised and 93 per cent of construction companies estimated that they were at their full capacity. The most significant obstacle for growth was still recruiting a workforce.