The last quarter of 2024 has begun, and Christmas music is starting to play in the shops. Unfortunately, the economic recovery predicted for autumn is not on the calendar but is getting further and further away. There are signs of improvement, but they do not seem to be translating into orders. However, optimism is underpinned by falling interest rates and low inflation. Inflation in Finland is forecast to be just above 1 % for the whole of 2024. Realised cuts in the lending rate and the consensus view that interest rates will continue to fall support the projections for increased investment. However, at present, it does not yet appear that this will affect volumes for the rest of the year. The upturn is now expected to begin in earnest in either Q1 or Q2 2025. Hopefully this will happen, as the wait has gone on for far too long.
Raw material prices have calmed down after the nervous bounce of recent years. Prices have remained more or less unchanged for just over a year. There have been monthly fluctuations due to different cost factors, but the overall price has remained within a few percent. The energy supplement has also remained moderate, but next winter could be more difficult. Electricity prices are expected to fluctuate sharply next winter due to various factors. This could also put pressure on steel prices. The worrying aspect of a possible increase in demand is that stocks are relatively low throughout the supply chain. In addition, steel mills have reduced their shifts, and some production lines have closed down completely. As a result, as demand grows, availability will rapidly decline and prices are likely to rise as a result, although they are still very high compared to a few years ago.
The situation in Jame-Shaft is in line with the general trend. The end of 2023 was very quiet, with delivery volumes briefly reaching a good level in January as customers replenished their stocks after the balance sheet date. After that, demand fluctuated sharply from month to month and was a major disappointment overall. The constant fluctuation also made it very difficult to manage production capacity and costs. However, the company managed to maintain good delivery accuracy, partly at the expense of profitability. The result for the financial year 1.7.2023 ‒ 30.6. 2024 was below budget by all indicators. Turnover was EUR 25 million and the result was about half of the target. The number of employees also fell, and now stands at 105.
The new financial year has started on a slightly more positive note. In the first quarter, turnover increased by 6 % compared to the same period last year. Employees who were laid off in the spring have also all returned to work. However, there is still plenty of spare capacity, so there is a good chance of responding to any increase in order volumes. As mentioned above, the availability of raw materials may be a problem. We have already prepared for this by increasing our own raw material stock according to our resources. Unfortunately, however, order intake for the rest of the year looks weak. October will be below budget and traditionally November and December are always rather quiet months. In addition, some of our customers have indicated that they will be taking a longer Christmas break than normal due to a low order book. Jame- Shaft also has to react to this. We will keep our factory closed for at least week 52, and longer if necessary. Please note that the delivery time for orders which have planned delivery date early in the January will be 1-2 weeks longer than normal. As a result, orders placed in early January should be made as quickly as possible so that we can produce the necessary products before the Christmas break.
Despite the lower turnover and the somewhat uncertain outlook, investments have continued. Our latest acquisition is a machining centre equipped with a robot for loading and unloading. Its final fitting is underway and installation for us will start in December. More on this in the next newsletter.
Our expanding international customer base is now increasingly pressing us with responsibility obligations. As a result, we also need to increase the amount of documentation we produce ourselves. There is plenty to do, as much of the documentation required deals with issues which are normal operating model or even written into law that have been taken for granted in Finland for decades. Because of that, we have not had these specifically recorded. In addition, many of the documents we need are only in Finnish, so in order to use them in the evaluations, they must first be translated into English. Alongside documentation, it would be desirable to emphasise and value concrete actions. For example, Jame-Shaft has been using only fossil- free electricity for more than ten years.
On October 1-3, we participated in the Tampere Subcontracting Trade Fair. There were more than 1000 exhibitors and around 17 000 visitors over the three days. The general mood at the fair was good but expectations for economic development were rather negative. There were hopes for improvement, but little positive concrete news. Thank you to everyone who visited our stand for your feedback and good discussions.
Our expanding international customer base is now increasingly pressing us with responsibility obligations. As a result, we also need to increase the amount of documentation we produce ourselves. There is plenty to do, as much of the documentation required deals with issues which are normal operating model or even written into law that have been taken for granted in Finland for decades. Because of that, we have not had these specifically recorded. In addition, many of the documents we need are only in Finnish, so in order to use them in the evaluations, they must first be translated into English. Alongside documentation, it would be desirable to emphasise and value concrete actions. For example, Jame-Shaft has been using only fossil- free electricity for more than ten years. Jame-Shaft at Subcontracting Fair at Tampere, Finland. On October 1-3, we participated in the Tampere Subcontracting Trade Fair. There were more than 1000 exhibitors and around 17 000 visitors over the three days. The general mood at the fair was good but expectations for economic development were rather negative. There were hopes for improvement, but little positive concrete news. Thank you to everyone who visited our stand for your feedback and good discussions. Let’s hope the forecasts are finally right and the economy picks up next year. If you see significant changes in volumes, please actively contact us and anticipate any additional needs in time to enable us to order the necessary raw materials.
We wish all our customers a successful and fruitful end of the year 2024.
Best regards,
Mika Tuunainen
Managing Director
Jameshaft Oy