PAM’s economic survey: Employer companies are now doing well, but PAM members are increasingly worried about their own finances

The strong economic performance of service sector employer companies continues. Only 8.8 per cent of respondents to PAM’s economic survey think that their employer’s finances have worsened over the last three months, whereas the corresponding share at the end of 2017 was 13.6 per cent. On the other hand, 28.1 per cent of respondents say that their employers’ financial situation has improved in recent months.

Growth has been strongest in the retail sector, where 49.1 per cent of respondents say that their employer’s sales have grown compared to a year ago, and in the hospitality sector, where 48.1 per cent of respondents have detected a growth in sales.

“Retail sales continued to grow strongly up to March. However, the Research Institute of the Finnish Economy forecasts that growth will stall this year despite the positive economic outlook. The tourism sector, however, has enjoyed a record winter season”, says PAM’s economist Olli Toivanen.

Employees’ worries overshadow growth
The respondents to the economic survey think that the financial situation of employer companies will improve further in the future. 40.8 per cent of respondents think that the financial situation of employer companies will improve and just 13.6 per cent think it will worsen over the coming year. These latest figures correspond very closely to the views of employees exactly one year ago.

Unfortunately the strong financial position of employers is still not reflected in the incomes of PAM members. Respondents feel that their financial position has worsened and are pessimistic about the future whilst worries about their own finances and the perceived threat of unemployment have again increased.

“You might wonder how solid the growth is in service sectors that are dependent on private consumption if household debt is at record levels and financial worries are increasing among low-income employees”, Toivanen warns.

Only 8.0 per cent of employees in the retail sector say their own financial position has improved and a full 28.4 per cent think it is deteriorated over the last three months. In the hospitality sector, 23.6 per cent of respondents feel that the threat of unemployment has increased and just 3.6 per cent think it has decreased. In the facility services sector, 28.9 per cent of respondents are more worried about their own finances.

“The consumer barometers of Statistics Finland for March and April showed a similar turn for the worse after peaking early in the year. PAM members, however, again see their own financial situation as being clearly weaker than the consumers on average”, Toivanen points out.

Job prospects falter in the hospitality sector
However, respondents’ estimate of how quickly they could find a new job if they became unemployed has improved slightly compared to the previous economic survey. The development has been most positive in the facility services sector, where only 10.5 per cent of respondents now think that their present job will be their last compared to 16.3 per cent in the previous survey.

In the hospitality sector, however, an increased perception of the threat of unemployment is also reflected in lower confidence in finding a new job, and a full 18.2 per cent of respondents do not believe they would find a new job if they were made redundant.

The information is based on the survey carried out by PAM from 4 to 18 April 2018. 336 PAM members responded to the survey. 93 per cent of them were in employment and 3 per cent unemployed. PAM publishes its economic survey every quarter.