Finland business confidence improved again in July, showing that many companies are becoming more optimistic about the country’s economic recovery. Factories, construction firms, service providers, and retailers all reported stronger business conditions and better expectations for the months ahead.
Yet the picture is far from complete. While businesses are preparing for growth, many Finnish households remain careful with their money. People are still worried about rising unemployment, uncertain global events, and the overall cost of living. As a result, consumer spending remains weak even as business activity begins to recover.
The latest figures come from separate reports released by the Confederation of Finnish Industries (EK) and Statistics Finland. Together, they reveal an economy that is improving on the business side while consumers continue to wait for clearer signs that the recovery will benefit their everyday lives.
Business confidence improved for the second month in a row, with nearly every major sector showing better results.
Manufacturing posted one of its strongest performances in years. Its confidence indicator rose from +4 in June to +7 in July, moving above its long-term average for the first time in several years. Manufacturers also reported healthy order books, falling inventories, and increasing production plans. Around 68 percent of companies said they were already operating at full production capacity.
These results suggest that demand for manufactured goods is gradually returning after a long period of weaker activity. Companies also expect production to continue rising through the coming months.
Construction delivered the biggest monthly improvement. The sector’s confidence indicator climbed from -17 to -5 after struggling through a prolonged slowdown. Companies said new orders had started to improve, giving the industry fresh optimism after several difficult years. Employment in construction is also expected to remain stable in the near future.
Retailers continued to benefit from steady sales. Confidence remained strong at +12, while service companies reported moderate but consistent growth in business activity and customer demand.
Taken together, these results point to a recovery that is becoming broader instead of being limited to one or two industries.
EK’s quarterly Business Tendency Survey paints an even clearer picture of improving economic conditions.
More than 1,000 companies employing roughly 260,000 people participated in the survey. Businesses reported that manufacturing expanded across many industries during early summer. Construction returned to growth after starting from a very weak position, while services continued to record rising sales.
Perhaps more importantly, companies became increasingly confident about the rest of 2026.
After a long period of cautious hiring, employers now expect employment to improve alongside continued growth in production. That shift matters because stronger hiring could eventually support household incomes and consumer spending.
Penna Urrila, Director and Chief Economist at EK, said Finland’s economic recovery is no longer limited to isolated industries.
According to Urrila, the latest survey shows that growth has become broader across the economy despite continued uncertainty in international markets. He also described improving employment expectations as one of the most encouraging developments after a lengthy period of weakness.
Although business confidence is improving, companies are not free from concern.
Weak demand remains the biggest obstacle facing many businesses. More than half of all companies surveyed, representing 53 percent of respondents, said insufficient customer demand continues to limit their operations.
Manufacturers also reported increasing labor shortages as production expands. Some companies are beginning to experience tighter production capacity, suggesting that growing activity may eventually require additional investment or hiring.
Businesses are also watching several international risks that could affect Finland’s economy.
EK highlighted ongoing tensions in the Persian Gulf, persistent inflation, possible future interest rate increases, uncertainty surrounding international trade policies, and the continuing war in Ukraine as major sources of concern.
These external pressures could influence exports, investment decisions, energy prices, and business confidence during the months ahead.
While businesses are becoming increasingly optimistic, consumers remain far more cautious.
Statistics Finland reported that the consumer confidence indicator stood at -5.3 in July. Although this is much better than the -10.5 recorded in May, it remains below the long-term average of -2.9.
The numbers show that many households still believe the economy has not fully recovered.
More than half of respondents, representing 53 percent, said Finland’s economy is weaker than it was one year ago. Only 14 percent believed economic conditions had improved.
Looking ahead, opinions remain divided. Around 27 percent expect the economy to improve during the next year, while 30 percent believe conditions will become worse.
This uncertainty continues to shape household spending decisions.
Consumer caution is especially visible when it comes to larger purchases.
Only 15 percent of respondents said now is a good time to buy durable goods such as furniture, appliances, or electronics.
Plans for future spending also remain weak.
Just 11 percent expect to increase spending on durable goods over the next year, while 39 percent plan to reduce their spending.
The housing market reflects similar hesitation.
Only 11 percent of respondents said they plan to buy a home or build a house during the coming year, indicating that many families are postponing major financial commitments until economic conditions become more certain.
The labor market remains one of the biggest concerns for Finnish households.
Half of those surveyed expect unemployment to increase over the next 12 months. Only one in five believes unemployment will decline.
These expectations help explain why consumer confidence continues to lag behind improving business indicators.
When people worry about job security, they often save more and spend less. That behavior can slow the pace of economic recovery even as businesses begin expanding production.
Consumers also estimated that prices had increased by 4.5 percent during the past year. They expect inflation to slow to 3.7 percent over the next 12 months, but inflation remains an important factor affecting household budgets.
Consumer confidence also varies across Finland.
The Greater Helsinki region recorded the strongest confidence reading at -1.2, making it the country’s most optimistic area.
Northern Finland recorded the weakest reading at -10.6, suggesting residents there remain much more concerned about economic conditions.
These regional differences highlight how economic recovery is not being experienced equally across the country.
Senior Statistician Pertti Kangassalo of Statistics Finland said consumers have not yet responded to the improving economic indicators.
According to Kangassalo, ongoing uncertainty both in Finland and internationally continues to influence public attitudes. Political developments, global economic risks, and broader uncertainty are preventing many households from sharing the optimism now visible among businesses.
Finland’s economy is showing genuine signs of improvement. Businesses across manufacturing, construction, retail, and services are reporting stronger activity, improving order books, and greater confidence about future growth. Employment expectations have also started moving in a positive direction after a long period of decline.
However, the recovery remains incomplete.
Consumers are still limiting spending, delaying major purchases, and worrying about unemployment and global uncertainty. Until households begin to feel more financially secure, domestic demand is likely to remain weaker than businesses would like.
The coming months will show whether improving business activity translates into stronger employment, higher incomes, and renewed consumer confidence. If that happens, Finland’s economic recovery could become more balanced and sustainable across both businesses and households.
