Finnish economy booming in nearly all sectors - employment also to improve

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Economic indicators in Finland are currently very good. The situation is seen as better than usual in all main sectors - industry, services, and construction.
      According to the latest Business Tendency Survey put out by the Confederation of Finnish Industry (EK), sales prices for industrial goods have gone up; orders are higher than they have been since the IT boom of 2000. In contrast to the surge six years ago, this time growth is not limited to one sector. In addition to manufacturing, there is rising demand for services and a boom in construction.
      Employment figures are also expected to improve throughout the summer, although considerable differences remain among the various sectors.
      "We can be satisfied with the present situation", said Leif Fagernäs, Director General of EK.
      The positive development was largely attributed to positive trends in key export markets, such as Sweden, Russia, China, and the new EU member states.
      "Traditional industry has managed to take advantage of globalisation", Fagernäs said.
      In the early part of the year personnel increased in all important sectors. According to the survey, shortages of skilled labour are emerging.
      One in ten industrial companies responding to the survey said that a shortage of labour is limiting potential growth in production. In construction 34 percent of companies felt that a shortage of labour was an impediment to growth, while 17 percent of service sector companies suffered from a shortage of labour.
     
Structural changes are still causing job losses in many sectors. The number of people working in at least the food and forest industries. Jobs in the paper industry are expected to go down significantly in the coming months - a process which Fagernäs called "creative destruction".
      Industry is now operating at high capacity. In April, 84 percent of respondents said that their full capacity was in use.
      Construction companies are also operating practically at full capacity. Only four percent of respondents had unused capacity.
     
Prospects were less positive in food production and transport.
      The trend was good in the building materials, wood, chemical, and technology industries. Things also looked good in the hotel and restaurant business, as well as in financing and insurance.
      Prospects are especially bright in the technology sector, which accounts for nearly 60 percent of Finland’s exports, and which reports a surge in orders at the beginning of the year.
      Production and exports are expected to grow considerably at least until the autumn. Sales prices of goods have risen, while production costs have declined.
     
According to a separate survey by the technology industry itself, outstanding orders for Finnish shipyards were 147 percent higher in late March than at the same time last year.
      Fagernäs warned politicians preparing for next year’s Parliamentary elections not to get too excited about the positive figures.
      Possible clouds on the horizon include an ageing population, weak development of new investments, the rising price of energy, and increased protectionism.
      Fagernäs added that Finland does not seem to be promoting research and development as much as had been hoped.
      The EK survey is published four times a year. The latest survey, with responses from 1178 enterprises, was conducted in April.


Links:
  EK Business Tendency Survey: Positive business expectations for the coming months

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