Sharp decline in output in November

Service sector kept economy afloat in late 2008

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Overall production in Finland declined dramatically by four per cent in November, compared with November 2007.
      “The decline was blood-curdling. Such a large fall in a month has not been seen since records on this time scale were started in 1996", says Veli-Pekka Karvinen of Statistics Finland.
     
The previous large monthly decline was in the summer of 2005, and was caused at the time by a lockout in the forest industry.
      In industry and construction the fall was nine per cent, and in agriculture and forestry, it was 16 per cent.
      The downward trend was mitigated somewhat by the service sector, where production remained unchanged compared with a year earlier.
      Services account for about 60 per cent of total output. “Services kept the national economy alive late last year. Without their balancing effect, we would have come crashing down”, Karvinen explains.
      However, there is significant variation within the service sector. Commerce declined by five per cent, but services in the public sector were in the black.
      “Traditionally, output in the public sector, such as education, health care, state and municipal administration, and the finance and insurance sector has brought stability and balance in economic declines. Teachers and nurses have not been made redundant”, Karvinen says.
     
Agriculture and forestry were brought down by the decline in the forestry part of the sector. There was a sharp decline in wood sales. In industry, the wood processing industry declined, but so did the rest of manufacturing.
      Industrial output declined by about 12 per cent, and construction went down by about five per cent.
      News about the construction industry has been dominated in public by problems in strong construction companies.
      However, the situation is balanced out somewhat by repair construction. Small-scale construction, including the construction of detached houses, continues to do reasonably well.
      Karvinen notes the advance data which came out at the end of last week was based on large companies, and that the situation might look better when the numbers from smaller enterprises are taken in.


Previously in HS International Edition:
  Research institute offers grim economic forecast (4.2.2009)
  Economic slowdown expected to keep food prices down (14.1.2009)
  Economic optimism plummets among consumers and industry (2.1.2009)

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