Poor times for commerce will continue this year. The Finnish Commerce Federation forecasts slight growth for next year. The number of employed people, however, will continue to fall. Tax increases would aggravate the situation even further.

According to the forecast by the Finnish Commerce Federation, readers of sales reports will have no reason for celebration even though it is expected that the worst is now behind us. The forecast predicts that retail sales revenue, or turnover cleared of price fluctuations, will continue to fall by half a percentage this year; last year the decrease was one per cent. Next year, retail trade will begin to grow at a very slow rate. It is predicted that sales will increase by one and a half per cent.

That is a far cry from the figures of a few years ago. In the early 2000s, prior to the financial crisis, average growth in the retail business was about four per cent; the Finnish Commerce Federation estimates that we will not see such figures in the next few years.

‘The growth of retail business is held back by the slow increase of purchasing power, population ageing, high taxes and international competition,’ says Jaana Kurjenoja, Chief Economist at the Finnish Commerce Federation.

In wholesale trade, the outlook is darkened by the dire situation in construction and industry as well as the slow recovery of the retail trade. It is expected that this year’s wholesale revenue will remain at last year’s level. The outlook is particularly gloomy for the first months of the year. Next year, turnover will grow by three per cent as investments and construction activities increase.

The decline in car sales continued last year but this year revenue will grow by four per cent and next year by five per cent. In the early 2000s, however, the growth rate was about eight per cent.

The employment rate in commerce will not start to increase this year

The slow increase in sales means fewer employment opportunities in the commerce sector, the biggest employer in the national economy. According to the forecast by the Finnish Commerce Federation, the rapid decline in the number of people employed will continue. The forecast predicts that the number of people employed in the field of commerce will fall by two per cent this year.

Employment in the retail business began to decline in the latter part of last year. Employment will decline by three per cent this year and next year it will remain at this year’s level. Employment in wholesale trade fell by two per cent last year, and by as much as four per cent in the latter half of the year. The downward trend in employment in wholesale trade will continue this year with a fall of one per cent. We will not see an increase in employment in wholesale trade until next year when, according to the Finnish Commerce Federation’s forecast, employment will increase by two per cent.

As for employment in car sales, we have reached the bottom. However, employment in car sales will not increase this year; however, next year, it will grow by two per cent. Next year will see slight growth, about one per cent, in the number of people employed in commerce.

‘In all main sectors of commerce, growth of turnover is uncertain and businesses are very hesitant to increase their workforce. In retail trade, cost competition and the poor development of purchasing power dampen companies’ willingness to hire people. In wholesale trade, companies are trying to attract business abroad,’ says Kurjenoja.

‘The Government should not make decisions to increasing taxes in its spring workshop. New tax increases could result in a severe crisis in the commerce and service sectors. That would be a hard blow for the economy and employment,’ warns Juhani Pekkala, Managing Director of the Finnish Commerce Federation.

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For further information, please contact:

Juhani Pekkala, Managing Director, juhani.pekkala(at)kauppa.fi, tel. +358 (0)9 1728 5111, +358 400 419 560

Jaana Kurjenoja, Chief Economist, jaana.kurjenoja(at)kauppa.fi, tel. +358 (0)9 1728 5134

The Finnish Commerce Federation represents commerce – the largest sector of the national economy. Commerce employs around 300,000 persons in Finland. The Federation has around 7,000 member companies and represents both retail and wholesale commerce in industry politics and labour market lobbying. www.kauppa.fi