The latest SME Barometer shows that the economic expectations of small and medium-sized enterprises (SMEs) are somewhat better than last spring. Similarly, expectations are higher than they were a year ago. Contributing to this more positive outlook are factors such as falling interest rates and persistently low inflation. In particular, the challenging situation in the construction sector is gradually easing.
An increasing number of SMEs anticipate their situation is more likely to improve than deteriorate. Behind this development are expectations of an economic recovery, which depends especially on stronger private consumption. Nevertheless, uncertainty still clouds the outlook.
“The outlook for SMEs has developed in a more positive direction since spring. This suggests signs of economic recovery. Vibrant SMEs are vital for economic growth, employment, and investment,” says Minister of Economic Affairs Sakari Puisto.
Investment Appetite Modest, Recruitment Plans Strengthened
The investment appetite of SMEs remains modest, although it is slowly rising. Only in the industrial sector are there more companies planning to increase investments than those expecting them to decrease.
Recruitment intentions, however, appear stronger than in the spring. Fourteen percent of SMEs plan to increase staff, while 11 percent expect to reduce headcount. The majority – 75 percent – intend to maintain their current workforce levels.
Trade Policy Tightened Competition and Raised Costs
This year, SMEs’ export expectations have been weighed down by strained trade relations due to U.S. tariff policies. More than one in ten SMEs reported that international tariff policies or other trade restrictions have raised their costs. In addition, about one in ten companies has faced tougher competition as a result of tariffs. The operating environment has been unusually uncertain for companies exporting to the U.S., and tariffs have negatively affected many SMEs.
“Uncertainty around international trade rules has caused entrepreneurs plenty of headaches this year. Companies need predictability and as few trade barriers as possible to feel confident in making investments and expanding internationally,” says Juhana Brotherus, Chief Economist at the Federation of Finnish Enterprises.
Despite the uncertainty, 34 percent of exporting SMEs expect their export value to grow in the next 12 months. In total, 24 percent of SMEs engage in exports or other international business. The most important market area is the Nordic region, where 68 percent of internationally active SMEs operate. The European Union follows closely at 63 percent. The next most significant market is the United Kingdom, with around one in five SMEs doing business there.
Growth Orientation Remains Modest
SMEs’ growth orientation remains modest compared to previous years. Growth ambitions have been in long-term decline, though the latest data suggests the trend is stabilizing. More than one-third of companies describe themselves as growth-oriented, either strongly or when opportunities arise. The share of companies pursuing growth “when possible” has increased slightly from last year’s weak figures.
“A positive sign of economic recovery is that the future outlook of young SMEs remains strong. Finland needs more growth ambition and entrepreneurs willing to take bold risks,” Brotherus says.
Growth from Research and Development
The success and growth of companies depend on new knowledge, innovation, and expertise. One in four SMEs reported engaging in research and development activities. This is most common in the industrial sector, where 37 percent said they are active in R&D. In addition, 5 percent of SMEs that do not yet conduct R&D plan to start within the next year.
Over the past year, 19 percent of SMEs have adopted new technologies and 47 percent have invested in digitalization. About half have provided training for their staff, and just under 30 percent have introduced new products or services to the market.
Challenges in the Financing Environment
SMEs still face challenges in accessing financing. The prolonged difficult economic situation, weakened creditworthiness, and tighter banking regulations are reflected in SMEs’ external financing. Of the companies that needed financing, 43 percent said they had not received or applied for it, even though they needed it. This is significantly higher than in spring 2021, when the figure was 25 percent.
Across all respondents, however, financing challenges were reported by only 15 percent. Finnvera encourages companies to launch forward-looking investments now, as they are essential for ensuring growth and competitiveness.
“Now is the right moment, with growing demand in Finland’s nearby markets, skilled labor available, and low interest rates,” says Juha Ketola, Executive Vice President at Finnvera.
In the current operating environment, growth must be sought through exports and increasingly from new markets. According to Ketola, companies first had to find replacement markets for Russia, and possibly now for the U.S. as well.
“A major question is whether SMEs are sufficiently aware of ways to hedge against export risks or leverage financing to ensure deals go through,” Ketola adds.
The SME Barometer is published twice a year by the Federation of Finnish Enterprises, Finnvera, and the Ministry of Economic Affairs and Employment. The latest survey gathered responses from 4,200 companies between mid-June and mid-July 2025.