Summary of the financial situation

The following is a short summary of the Panel economic barometer that the Ostrobothnian Chamber of Commerce conducted among its member companies at the end of April 2023.

The growth prospects for the Western economies are weak and inflationary pressure continues to be high. The central banks have a difficult task as austerity measures are needed to reduce inflationary pressure, at the same time as the austerity measures risk leading to recession.
The economic situation for companies in Ostrobothnia and Middle Ostrobothnia is still quite weak, but not dramatic. Nevertheless, two thirds of the companies state that turnover expectations are greater this year than last year, at least in part this can be explained by increased prices. About 70 percent of the companies plan to raise sales prices also in the coming months due to increased production costs. About 42 percent of industrial companies state that the order backlog is now lower than last year. About 60 percent of companies in the construction sector experience the mood as pessimistic or very pessimistic. Some companies in the construction industry indicate that the profitability of the industry is threatened by the fact that some players in the industry felt forced to accept jobs at a lower price. In the service industry, economic indicators show growth. Up to 42 percent of companies in the service industry view the mood as optimistic or very optimistic. In the trade industry, people are most pessimistic, but the mood has improved since the last survey. Despite this, up to 63 percent of businesses in the trade sector predict that their turnover will reach or exceed the previous year’s level.

The inflation rate in March was 7,9 percent. As overall price levels rise, it is particularly important for companies to monitor their costs and profitability. If your costs increase, we recommend you to review your prices and if possible, increase them to protect your margins. If your company has excess liquidity, meaning it has more money in its bank account than needed for the daily operations, consider investing in assets, securities or other investments that are expected to increase rather than decrease in value. Our clients often ask us for investment advice. The best advice we can give, is that it is often a good idea to start by booking an appointment with an investment adviser at your bank.