In May 2020, the total industrial output in Finland was only four per cent lower than a year ago. Instead in the EU-27, the situation was worse. However, Finnish goods exports have started to decline due to coronavirus, while new orders in industry as well as total employment have begun to weaken. The information can be found in Etla Economic Research’s Kuukausiraportti-report published in August 2020 and updated monthly by the research institute.
This spring, industrial output in Finland has been a dim spot of light as the coronavirus weakened economies across Europe. In May, total industrial output in Finland was only four per cent lower compared to the same period one year ago. In other EU countries the situation has been much worse: the decline was 21 per cent across the EU, and well over 30 per cent in the automotive-dominated Slovakia. In Finland, chemical industry and electrical and electronics industry grew between March and May compared to the same period one year ago. Production development was the weakest in the food, transport and machinery and metal products industries.
Finland’s goods exports have started to decline, like global trade in goods. The volume of goods exports decreased clearly in April and May: the seasonally adjusted volume of exports was nearly 11 per cent smaller than in February and March even though the strike in Finland’s paper industry weakened February’s numbers. Etla’s Kuukausiraportti-report in August reveals that the weakness in exports was widespread this spring.
The value of new orders in Finnish industry has also weakened – in May the decline was 28 per cent compared to the same period one year ago. Paper and chemical industry declined by 30 per cent, metals industry about half of this. In the paper industry the general trend in new orders was already the weakest since 2009.
Service sectors suffer bad times, not retail though
In many service sectors the volume of value added will clearly decrease this year, and more than in industry. Between March and May the seasonally adjusted volume of output was 57 per cent lower in the accommodation and restaurant sector than between December and February. Similarly, e.g. transport and storage (-20%), travel agents (-74%), broadcasting (-19 %) and their programme production (-35 %), and advertising (-22%) have weakened. The retail sector has, on average, fared relatively well and new car registration recovered from the pit caused by the coronavirus.
Country-specific confidence indicators collected by the European Commission recovered slightly more in July – indicators hit rock bottom in April when the composite index was at the same level as in the financial crisis in 2009.
– It is possible that as COVID 19 -cases are on the rise again, several EU countries will see a halt or even a slight weakening of confidence in August and September. Besides the coronavirus, a sharp slowdown in global economic growth, debt levels, and Brexit are also causing uncertainty, states Etla researcher Ville Kaitila.
Etla’s Kuukausiraportti-report is a subscriber-only publication (500 euros/year) that interprets key economic data and reports a monthly updated overview of the state of the economy. The report complements both Etla’s forecasting group’s primary publication “Suhdanne” (published in March and September) that contains Etla’s forecasts for the international and domestic economies, and the related industry-specific forecast “Toimialakatsaus” which is also published twice a year.