EK warns: unemployment & bankruptcy could be worse than 90’s recession

Many companies report lay-offs, and almost 20% say they fear the coronavirus pandemic will put them out of business.

File picture of small business and economy / Credit: iStock

The Confederation of Finnish Industries EK is warning that the coronavirus crisis could cause a wave of unemployment and bankruptcy worse than the 1990’s recession.

A new survey by the organisation finds that almost 20% of employers fear bankruptcy; 42% of respondents say the coronavirus crisis has severely weakened their business – double the figure just two weeks ago; and layoffs have already been made in 37% of Finnish companies.

“The financial distress of employers has deepened rapidly. Layoffs are on the rise, but the redundancy threshold is high even in times of crisis” says EK CEO Jyri Häkämies.

“The unfortunate conclusion of the business survey is that there may be a giant unemployment and bankruptcy wave even more severe than the recession of the 1990s” he adds.

The new survey also finds that about half of companies need face masks, gloves or other protective equipment in their operations but 65% of them say they’re concerned about the availability of these items.

The equipment is needed not just for healthcare workers, but in other sectors like trade, property management and the food industry.

EK says it’s looking at how some of the companies in its member associations could pivot their businesses to manufacture protective equipment like face masks and clothing that are needed during the epidemic.

The coronavirus-specific survery was answered by 1,873 entrepreneurs and business leaders, all of whom are employers. It was carried out in the last days of March for EK.