Business cycle Finnish large companies prepare for creepy economic growth – “Visibility is weak and so is the desire for new adventures”, sums up the working life professor

Almost 80 per cent of large companies are prepared for the long-term slow growth of their business and economy, according to a survey commissioned by the financial group OP.

In Finland According to a survey commissioned by the financial group OP, large companies in operation have two concerns above all others: the uncertainty caused by the coronavirus pandemic and the resulting weak business growth expectations.

According to the survey, large companies’ estimates of future investments have fallen sharply and almost 80 per cent are prepared for a long period of slow growth in their business and economy.

Large companies operating in international markets believe that demand will grow by an average of 0.7 per cent, while growth in demand in the Finnish market is not even expected.

The survey would be answered by the 161 largest companies operating in Finland, with an annual turnover of approximately EUR 250 billion. The responding companies employ a total of almost 600,000 people in Finland and abroad.

In January – November last year, the turnover of large companies shrank According to Statistics Finland, 6.8 per cent, which is an exceptional deal.

Strongly the share of large companies expanding their business has decreased from 24% to 19% in two years.

President of OP Corporate Bank Katja Keitaanniemi emphasizes that the coronavirus pandemic has caused a lot of headaches for large companies.

“Overall, investment growth is clearly slower than in the previous survey a year ago. However, it is positive that companies announce that they are ready to make investments quickly if demand increases, ”says Keitaanniemi.

Investments that secure the current business operations of large companies focus on tangible objects such as premises, machinery and equipment. They are mainly used by companies to defend their market position. On the other hand, the share of large companies seeking growth in tangible investments collapsed by as much as 13 percentage points per year.

Impaired Despite the investment outlook, nearly 85 percent of large companies say they are willing to invest quickly if demand is forecast to grow.

Intangible investments planned by large companies will focus primarily on new business such as digital distribution channels and business models.

Keitaanniemi emphasizes that the uncertainty caused by the coronavirus pandemic has trained companies to be more agile and look for new growth areas for their business.

According to the survey, the willingness of large companies to operate in a prolonged period of slow growth has increased during the year, and they remain convinced of the need for long-term development.

The survey was conducted last autumn and was conducted by the Nordic Institute of Business & Society, a cooperative research organization founded by Aalto University professors.

“If the message of the results of the study were described as weather, it would correspond to a mild but bad winter morning on the southern coast of Finland. Visibility is low and so is the desire for new adventures, ”says Aalto University’s working life professor. Pekka Mattila.

Finland It is positive from the point of view of the national economy that 30 per cent of large companies believe that they will increase their production in Finland this year. Only seven per cent of respondents anticipate production cuts in Finland.

“The pace of economic recovery in the global economy and in Finland is central to the operating conditions of companies,” Keitaanniemi says.

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