Up to 41 percent of small and medium-sized enterprises (SMEs) in Finland are preparing to carry out layoffs, and 10 percent consider it possible that they may go bankrupt next year, the Confederation of Finnish Industries (EK) said in a press release published on Monday.
According to a business survey carried out by the EK, the prospects for the country’s SMEs in 2023 are in many respects almost as gloomy as they were at the end of 2020, the first year of the COVID-19 pandemic.
Furthermore, 35 percent of SMEs estimated that demand would decrease, and the same percentage of the respondents anticipated that investments would shrink next year.
Up to 25 percent of companies engaged in international operations predicted that foreign trade would decline.
As a result of the Russia-Ukraine conflict, the increased raw material and energy prices force companies to be cost-effective and consider adaptation measures, said Jari Huovinen, the EK’s leading expert. Smaller businesses find themselves in the tightest spot as the consecutive crises have exhausted their financial buffers, he added.
However, what brings hope for next year is that, in addition to adjustment measures, many companies – especially larger SMEs — are also renewing their operations and intend to invest and recruit, Huovinen said.
The outlook for next year is gloomy all across Finland, especially in the country’s eastern and northern regions, where, respectively, 44 percent and 43 percent of the companies expect demand to shrink.
A company with at least two but fewer than 250 employees is considered an SME. There are approximately 84,500 such entities in Finland.
The EK is the largest employers’ association in Finland. Its member companies collectively contribute over 70 percent of Finland’s gross domestic product (GDP) and more than 95 percent of its exports.