Record number of Finnish SMEs report poor financial health

A recent Entrepreneurial Poll reveals a significant downturn in the financial well-being of small and medium-sized enterprises (SMEs) in Finland. According to the survey, 19% of SMEs report their financial situation as either poor or very poor, marki

By: helsinkitimes.fi

Apr 19 2024
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Record number of Finnish SMEs

A recent Entrepreneurial Poll reveals a significant downturn in the financial well-being of small and medium-sized enterprises (SMEs) in Finland. According to the survey, 19% of SMEs report their financial situation as either poor or very poor, marking the highest level since the question was first posed in May 2022.

The poll, conducted between April 3 and 15, 2024, by Entrepreneur's Verian, collected responses from 1,076 SME representatives.

Despite challenging conditions, 51% of respondents still describe their financial situation as good or very good, a figure that has remained relatively stable this year.

Mikael Pentikäinen, CEO of the Finnish Entrepreneurs Association, commented on the findings, "The deterioration in business conditions this spring is apparent. It's largely driven by political strikes and a slowdown in the economy. Unfortunately, the tax decisions from the recent budget negotiations are likely to squeeze those already struggling even further."

Industry and Trade Sectors Hit Hardest by Strikes

The poll highlights that the commerce and industrial sectors are particularly affected, with 24% and 22% of businesses in these sectors respectively reporting poor financial health. In the industrial sector, 11% describe their situation as very poor, a significant increase from just 1% in February 2024.

Strikes by labor unions have impacted 46% of SMEs negatively, while only 1% reported a positive impact. "Particularly, strikes have struck hard at the trade and industry sectors. They mainly cause damage to businesses and their workers," said Pentikäinen.

Economic Impact of Strikes

The largest economic damages from strikes are seen in small industrial businesses, where nearly half report losses up to 100,000 euros. "There's a significant risk of losing both businesses and jobs due to the strikes," Pentikäinen warned.

Negative effects reported include customer suffering (38%), disruptions in logistics chains (24%), business losses (22%), worsening profits (20%), and disruptions in imports (11%).

Pentikäinen also expressed relief at the cessation of further strikes by the Finnish Confederation of Trade Unions (SAK), noting, "It's good that SAK isn't continuing strikes that would shoot in the foot especially Finnish entrepreneurs and workers."

This survey, with a confidence interval of 3.1 percentage points, provides a stark illustration of the current challenges faced by Finnish SMEs and underscores the need for supportive measures and strategic planning to ensure their sustainability and growth.