(Bloomberg) — Finland’s biggest companies, with combined sales of about 244 billion euros ($267 billion), are largely shrinking as borrowing costs rise to fight inflation.
According to research commissioned by the Nordic Institute of Business & Society’s OP Group, only one in 10 companies plan to invest in expansion this year. This is the lowest share since 2015 and represents a “significant” decline from two years ago, when one in three people were still looking for growth.
Instead, companies turned inward, focusing on increasing productivity and efficiency. Two in three of the 176 executives surveyed said they expected uncertainty around interest rates to cause problems for their companies in the coming years, with even moderately indebted companies now We predict that the investment is unlikely to be profitable.
Still, companies’ ability to make profits remains “relatively good”, said Katja Keitaniemi, chief executive officer of OP Corporate Bank. Large companies are “actively waiting” for the post-recession period, Keitaniemi added.
The survey, which included responses from 141 companies, found that the majority of large companies are currently looking to grow outside of Finland, with the eurozone in particular expected to increase sales more than other regions.
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