Tesi’s Growth Company Pulse Survey: inflation and supply chain disruptions hit profitability

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The positive outlook indicated by the Growth Company Pulse Survey published by Tesi (Finnish Industry Investment) early this year has changed to expectations of lower profitability. The impact of inflation is most evident in manufacturing, where prices of factor inputs have risen steeply. Russia’s invasion of Ukraine will have more impact on Finnish businesses than is evident at present.

“A deterioration in profitability is evident in all the sectors reviewed, although estimates of growth in net sales vary. Prices of factor inputs have risen since January more than the increases in selling prices forecast for the full year,”  says Tesi’s CEO Jan Sasse.

“The situation seems particularly challenging in manufacturing, which is beset by supply chain disruptions, strongly rising inflation and a slackening pace of investment. The impacts of Russia’s attack on Ukraine are also more apparent in manufacturing, and these negative impacts are expected to become worse over the longer term,” adds Tesi’s Chief Digital Officer Henri Hakamo.

Inflation, growth and profitability

The survey indicated that prices of factor inputs have risen since the start of the year by 15% in the manufacturing sector, 5% in the information & communication sector, and 9% in the accommodation & food services sector. Correspondingly, estimates of increases in selling prices for the full year are 11% in the manufacturing sector, 4% in the information & communication sector, and 8% in the accommodation & food services sector.

Estimates for growth in net sales for 2022 are 5% (10%) in the manufacturing sector, 17% (19%) in the information & communication sector, and 14% (11%) in the accommodation & food services sector. Estimated EBITDA for 2022 is 10% (16%) in the manufacturing sector, 10% (18%) in the information & communication sector, and 9% (16%) in the accommodation & food services sector (January survey figures in brackets).

This survey is a follow-on to the Growth Company Pulse Survey published by Tesi in January. The present survey updates the review published in January with the impacts of Russia’s war of aggression in Ukraine and of the continuing coronavirus pandemic on Finnish businesses. The survey covers 630 respondent companies and was conducted by Taloustutkimus between 23 March and 8 April 2022. The sectors reviewed were: Manufacturing; Information and Communication; and Accommodation and Food Service Activities. Companies of less than five people were excluded from the survey.

Additional information:

Jan Sasse, CEO, Tesi, jan.sasse@tesi.fi, +358 40 861 9151
Henri Hakamo, CDO, Tesi, henri.hakamo@tesi.fi, +358 40 503 4221
Susanna Aaltonen, Communications Director, susanna.aaltonen@tesi.fi, +358 40 593 4221

Photos for media:

Jan Sasse’s photo
Henri Hakamo’s photo

Tesi (Finnish Industry Investment Ltd) is a state-owned investment company that wants to raise Finland to the front ranks of transformative economic growth by investing in funds and directly in companies. We invest profitably and responsibly, hand-in-hand with co-investors, to create the world’s new success stories. Our investments under management total 2.4 billion euros. www.tesi.fi | @TesiFII