Situation report by the Ministry of Economic Affairs and Employment provides an overall view of the effects of coronavirus on companies, employment and sectors
The economic recovery that began in Finland during the summer has stalled. The near-term outlook for the service sectors have started to deteriorate amid rising coronavirus infections and a shift towards the acceleration stage of the epidemic. The outlook for industrial production remains subdued, but recovery measures and a pick-up in demand are expected to give some boost to industry.
These are the conclusions of the most recent situation report by the Ministry of Economic Affairs and Employment. The updated information package collates follow-up data on companies, the labour market, different sectors and changes in the operating environment during the coronavirus crisis.
The support measures targeted at companies have helped to keep the number of initiated bankruptcies at a lower level than in the previous year. Consumers’ purchase intentions remain at a good level, although confidence in general fell in September. This signals a boost to the economy from consumption as long as the uncertainty in the industry does not spread extensively to the economy and massive job losses can be avoided.
The risk to the economic recovery has materialised as the number of infections started to rise in August and has increased rapidly in several EU countries. New restrictive measures will have a negative effect on economic activity. It looks increasingly unlikely that the global economy will experience a V-shaped recovery.
Processing of coronavirus support to companies in the final stages, new support for business costs under preparation
Targeting the MEAE Group’s support to those sectors mostly affected by the crisis has succeeded relatively well. The application period for direct subsidies has mostly ended, but applications for reemployment support in the restaurant sector will be accepted until 31 October.
The majority of applications for different financial instruments have been processed. The demand for loan-based support continues, but at a low level. The Ministry of Economic Affairs and Employment has launched an extensive review of the effects of the coronavirus support.
Following the deterioration in the coronavirus situation in September–October, the Government has also discussed possible alternatives to business cost support for sectors where the impact of the epidemic on operating conditions has been the worst. The Ministry of Economic Affairs and Employment, together with the Ministry of Finance, is currently preparing a report on the introduction of general fixed-term business cost support, including its criteria and the required legislation.
The number of laid-off people down by more than 100,000 from the peak in the spring
Currently there are more than 100,000 fewer laid-off people than during the peak experienced in the spring. According to the Ministry’s registry, the number of unemployed jobseekers fully laid off continued to decrease during September and their number totalled below 60,000 at the start of October. However, the number of laid-off people has multiplied from last year. Although the peak in the growth of lay-offs has passed, the growth no longer slows at the same pace as in June–July.
So far, the Employment and Economic Development Offices (TE Offices) have received relatively few announcements of redundancies caused by cooperation negotiations, but there were some alarming news about several large companies starting cooperation negotiations in August–September. Even though they do not yet show in labour market statistics, they signal a deterioration in the situation, possibly earlier than the Ministry of Economic Affairs and Employment predicted in June.
Based on the number of lay-offs, companies in the accommodation and restaurant sectors have suffered the most from the coronavirus crisis, while geographically Lapland and Uusimaa have been hit hardest.
The rise in unemployment among young people and in long-term unemployment are a cause for concern.
Coronavirus report provides information about the situation in different sectors and regions
The Ministry’s updated coronavirus situation report will be published as an attachment to the press release and provide additional information on, for example, various financial instruments and the situation with companies, job seekers and different sectors. The report also includes a review of the economic situation and observations on the EU and international situation, the energy market and the security of supply.
Sampsa Nissinen, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 047 189 (sectors, coronavirus financing, in particular Business Finland, Finnvera and Finnish Industry Investment)
Sirpa Hautala, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 3684 (support from ELY Centres)
Tiina Tikka, Director of Development, Ministry of Economic Affairs and Employment, tel. +358 29 504 7962 (cooperation negotiations, employment trends)
Erno Mähönen, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7066 (lay-offs and employment trends)
Eeva Alho, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 504 7083 (economic outlook)
Pauliina Porkka, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 504 8278 (EU and international affairs)
Juho Korteniemi, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7054 (energy markets)
Henri Backman, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 3581 (security of supply)