Companies | OP: Finland’s big companies are tightening the money taps quickly

Finland large companies are quickly moving from the pursuit of growth to efficiency, according to the Large Business Survey commissioned by the OP Group. At the same time, companies’ faith in Finland’s economic policy is severely shaken.

“The share of companies aiming for growth has dropped, and now companies want to invest more in continuity,” says the CEO of OP yritysbank Katja Keitaanniemi.

“The focus on safety is understandable, because the operating environment has changed.”

Even the previous survey at the time, the companies’ responses showed optimism after the corona pandemic. After that, Russia started its war of aggression in Ukraine, and the economy has been weighed down by inflation, rising interest rates and the threat of recession.

In last year’s survey, there were 34.5 percent of companies willing to expand, now only 19.4 percent. Instead, there are now 45 percent of companies that mainly aim to make operations more efficient, i.e. 15 percentage points more than a year ago.

However, according to Keitaanniemi, the financial situation of large Finnish companies is stable. He emphasizes that OP is a major lender to companies in Finland, so the bank has plenty of tacit information about the companies’ situation.

That’s why he dares to say that even though companies are making their operations more efficient, there are no big waves of layoffs or bankruptcies in sight.

“There is nothing visible that would indicate waves of layoffs. The research shows that large companies would add a little more people.”

Large companies approach the post-crisis period with confidence. 86 percent of the respondent companies say they are ready to invest quickly if demand forecasts turn to growth.

“The companies themselves feel that their financial position and balance sheet are strong. Faith in the future and in our own business model is strong, even though the world has changed.”

The biggest companies see the acceleration of inflation, problems with the availability of workers and unreliable supply chains as threats.

90 percent of the respondents see the acceleration of inflation as a threat to their own company. Almost the same number of respondents say inflation increases the pressure to raise wages in the company’s industry.

“I was surprised that the threat of inflation is so strong, even though many companies have been able to transfer rising costs to prices,” Keitaanniemi says.

More companies than before also perceive the competition for experts as a threat. Almost all companies find the competition for talent tough.

“The competition for talent is really wide-ranging, and it applies to both employees and white-collar workers. There is fierce competition for good employees in different ways, one of which is salary.”

Business leaders the view of the current state of economic policy was further darkened by the harsh readings of last year’s survey. 95.6 percent of business leaders are of the opinion that the public finances are not progressing towards balance.

Almost the same number of respondents believe that the government is getting into debt uncontrollably. In addition, almost all respondents disagree with the statement that the government is actively dismantling structural friction factors and incentive traps.

“Unfortunately, the economic policy lines have not satisfied large companies. Almost no one believes that the public finances will move towards balance or that indebtedness will be brought under control.”

In OP’s survey, large companies were also asked for their views on the Russian market. 93 percent of the respondents believe that Russia will remain a closed market in the future as well. Correspondingly, 86 percent of business leaders believe that the NATO relationship strengthens Finland’s attractiveness as an investment destination.

OP Group’s Large Enterprise Survey was conducted for the 11th time. The survey was carried out in cooperation with the Nibs think tank founded by Aalto University professors.

199 management team members from a total of 139 large Finnish companies participated in the survey. The combined annual turnover of the participating companies from the last fiscal year was 204 billion euros.