Employers' barometer: Upward swing in economic cycle under way

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According to the economic barometer published by the Confederation of Finnish Industry and Employers (TT) on Thursday, the business outlook indicator for industry rose to 29 in April, compared with 19 in January. Improvement was expected by more respondents than earlier, 32 %, while worse prospects were expected by 3 %. The remaining 65 % forecast no change in the coming months.
      The business outlook indicator is calculated by subtracting the percentage figure of respondents that expect deterioration from the percentage figure that expect improvement.
     
The best business outlook is expected in the chemicals industry. This trend is backed by the fact that production was on the increase also in the construction and paper chemicals industries. The trend is expected to continue also in the coming months.
     
The positive expectations are based on industry’s confidence in the revival of the export sector. Exports are expected to pick up during the summer and early autumn.
      There was growth in both production and exports in January-March, and new orders were received at the forecast rate. The order backlog strengthened, but still remained lower than usual. Nevertheless, it rose to its highest since 2000, when the current economic downturn began.
      However, the industrial labour force continued to decrease in January-March, although the reductions implemented in industry were approximately as anticipated. Director Jussi Mustonen of TT warns that the labour force is not expected to increase until 6-12 months after the beginning of the upward swing. According to TT, the labour force can be expected to decline by another 15,000 this year. Last year, the manpower reduction in industry was 23,000.
      Compared with the 2003 figures, the labour force started to grow in the electrical and electronic industry as well as in housing construction during the first few months of the year. Industry confidence in revival of exports has strengthened.


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  Industry confidence in revival of exports has strengthened.

Helsingin Sanomat