Business Finland has conducted two separate surveys on the effects of the coronavirus pandemic on its customers. The second follow-up questionnaire focused on companies that have used Business Finland services regardless of industry and the other on travel industry companies. When comparing with results from the survey conducted a month ago, it is clear that the situation has developed significantly for the worse.
Companies' assessments on the effects of the pandemic on their turnover have become significantly more pessimistic over the past month. At the beginning of February about a half of respondents to Business Finland's survey still expected that impact on their turnover would be very small, but in March only 7% made such an assessment and 85% expected effects to be negative of very negative.
"Corona's effects can be seen everywhere in the world and companies' assessments of the impact of the pandemic on both turnover and jobs have developed in a significantly negative direction," says Executive Director Kalle Kivekäs from Business Finland.
"Whereas in February the crisis caused massive disruption in Asia, directed at production and Chinese travel and consumption, it has now caused a worldwide economic standstill," Kivekäs continues.
More dramatic still have been the assessments on the impact of the pandemic on the number of jobs. In February, 80% of companies felt that jobs would not be effected or the impact would be small. In March, 60% expected the impact to be negative or very negative.
"As the local epidemic has grown into a pandemic, consumer consumption is limited to necessities. Travel and company investments have ceased."
Of the companies that responded to Business Finland's survey, two thirds are looking for extra funding to secure their operations. Almost half of the respondents have furloughed or are planning to furlough their employees. Other actions companies mention include salary flexibility agreed with employees, cutting back on costs of premises or other costs, focusing on product development, significant changes in business models, moving operations online, redundancies or closing business.
Companies felt that deferred product development loan payments, longer payment times and Business Finland's new funding in disruptive circumstances offer important tools in beating the crisis.
"The attention of many companies is on surviving the acute crisis. Business Finland helps companies get over the worst, for instance, with the funding for disruptive circumstances instruments," explains Kalle Kivekäs. He encourages customers to prepare for the time after the coronavirus.
"Preparation for the time after coronavirus must be started now. Business Finland has its eyes and ears open around the world. We are already offering companies information on opportunities around the world. We will make these insights and signals available on our online services, for instance on the Team Finland Market Opportunities service."
The survey conducted by Business Finland's Visit Finland unit shows that 46% of travel companies will be making significant losses in the first quarter. By the second quarter, the number is expected to rise to upto 86% of companies.
Half of the responders expect to be making significant losses in the third and a fifth of companies even in the fourth quarter. Companies have launched large scale actions to minimize the risks of the coronavirus pandemic.
Furloughs are second on the list of ways and means, when a couple of weeks ago feelings were still optimistic and most companies were planning to assess the effects of the epidemic and focus marketing activities towards domestic travel. Companies are minimizing costs and ensuring funding through loans or Business Finland funding.
Head of Visit Finland Paavo Virkkunen states that the coronavirus pandemic is causing large scale economic damage to Finland's travel industry, which has become Finland's second most important service sector exporter and an important regional employer for the national economy.
"The travel sector needs help immediately. To speed up processing the enormous number of applications to Business Finland, Visit Finland has directed its resources to registering and processing applications for funding in disruptive circumstances. We encourage travel industry operators to use these instruments as effectively as possible so that we are ready to serve again once the crisis eases and the possibility to travel opens up again. Distribution routes and channels need to be ready at this stage – once the crisis is over and travel restarts," Virkkunen says.
Team Finland Market Opportunities online service
Kalle Kivekäs, Executive Director, Business Finland
kalle.kivekas (at) businessfinland.fi
+358 50 482 1095
Paavo Virkkunen, Executive Director, Visit Finland
paavo.virkkunen (at) businessfinland.fi
+358 40 766 6355
Business Finland is the Finnish government organization for innovation funding and trade, travel and investment promotion. Business Finland’s 600 experts work in 40 offices globally and in 16 regional offices around Finland. Business Finland is part of the Team Finland network. www.businessfinland.com