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No turn for the better in sight
Industrial conditions in Finland are still much worse
than normal. There is no turn for the better in sight, at
least not during the final part of the year. The poor trend
in the economy, which is now in its third year, is eating
away at the resources accumulated by companies during the
good years of growth.
The business tendency survey published by the Confederation
of Finnish Industry and Employers (TT) in August shows that
industrial output, exports and the number of jobs fell much
more than predicted during the spring and first part of the
summer. Nor have as many new orders been obtained as had been
expected. The prices of products went down and companies'
competitive standing in exports generally weakened outside
the EU.
The indicator that sounds out economic prospects dropped
to -1 in July, whereas the figure in May was 5. An improvement
in prospects was expected by 13 per cent of respondents, a
deterioration by 14 per cent, while 73 per cent expected no
change in the situation in the next few months. The balance
figure is calculated by deducting the proportion of those
expecting a deterioration from those expecting an improvement
Expectations still high
The downturn is causing a particularly hard time for medium-
large exporting companies. SMEs operating on the domestic
market are more confident. At this moment demand is being
sustained mainly by domestic-market companies.
In spite of the lean times, industrial companies are looking
optimistically at the trend in output and exports. It is thought
that more new orders will be obtained in the autumn than those
received at the beginning of the year. Prices of products
are expected to continue their fall and the number of people
in work will be reduced. There will be hardly any investment.
The most hopeful of the industrial sectors are the graphics,
textile and clothing, and metal and electronics industries,
while the most gloomy are the construction and building products
industries.
A slight upturn is forecast at the end of the year in the
trends in ICT services i.e. telecommunications, data processing
services and the associated wholesale trade and renting of
equipment. There is cautious optimism in the air, because
the lowest point in the this area may now have been reached,
and it is thought that sales will increase in the next few
months.
Source: TT's business tendency survey, August 2003
>> www.tt.fi/english/bts
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