Recession is reducing the enterprises¿ investments

In the 3rd quarter of 2008, enterprises invested about 9 billion kroons in fixed assets, which is about 2 billion less than a year ago. When in the 1st quarter investments increased 10% compared to the previous year, then since the 2nd quarter a decline started and enterprises’ investments decreased 4%. In the 3rd quarter enterprises’ investments were already about a fifth smaller than a year ago.

The decline was mainly caused by the decrease of investments in construction and alteration of buildings. Construction of buildings decreased by 23% compared to the 3rd quarter of the previous year. The rapid decline of investments shows enterprises’ insecurity and more severe loan conditions. It is more difficult to get loans and the banks’ risks margins are higher. Even if enterprises have a possibility to finance, they evaluate their risks more conservative.

Investments in fixed assets, 1st quarter 2004 – 3rd quarter 2008

In the 3rd quarter enterprises sold goods and services for 170 billion kroons at current prices, which is 1.5% more than a year ago. Trading and manufacturing enterprises accounted for the largest share in net sales, respectively 43% and 20% of the total volume. The net sales growth is on a low level mainly because of high prices, which have decreased the sales in trading. In the 3rd quarter compared to the same period of the previous year, consumer prices rose 10.9%.

In the 3rd quarter 2008 compared to the same quarter of the previous year, the total profit of enterprises decreased by a fifth and stayed on the level of the previous quarter. The total profit of enterprises was 11.5 billion kroons in the 3rd quarter.