(Bloomberg) — Finland’s largest companies, with combined revenue of about €244 billion ($267 billion), are largely retrenching in response to higher borrowing costs intended to tackle inflation.
Just one in every ten companies is planning to invest in expansion this year, according to a survey commissioned by OP Group from Nordic Institute of Business & Society. That’s the lowest share since 2015 and shows a “significant” decline from two years ago when one in three were still seeking growth.
Instead, corporates have turned inwards with the focus on boosting productivity and efficiency. Two in three of the 176 managers who responded expect uncertainty over interest rates to bring problems to their companies in the next few years, with even moderately indebted companies now projecting that investments are unlikely to be profitable.
Still, companies’ ability to make a profit has remained “relatively good,” said Katja Keitaanniemi, chief executive officer at OP Corporate Bank. Large companies are in a mode of “active waiting,” preparing for the period after the economic downturn, Keitaanniemi added.
The majority of large companies are now looking for growth outside of Finland with euro area in particular seen to boost sales more than other regions, according to the survey, which included responses from 141 companies.
