Finnish Technology Industry Dec 2013, statistics

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The Federation of Finnish Technology Industries: Situation and outlook, December 2013

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Finnish Technology Industry Dec 2013, statistics

  1. 1. The Federation of Finnish Technology Industries December 2013
  2. 2. The Technology Industry Is Comprised of Five Sub-sectors Electronics and Electrotechnical Industry ABB, Ensto, Murata Electronics, Nokia, Nokia Siemens Networks, Planmeca, Polar Electro, Suunto, Vacon, Vaisala... Mechanical Engineering Abloy, Cargotec, Fiskars, Glaston, Kone, Konecranes, Metso, Normet, Oras, Patria, Pemamek, Ponsse, Prima Power, Stala, STX Finland, Valtra, Wärtsilä... Metals Industry Boliden, Componenta, Kuusakoski, Luvata, Norilsk Nickel, Outokumpu, Outotec, Ovako, Rautaruukki, Sacotec… Information Technology Affecto Finland, Basware, CGI, Codebakers, Codenomicon, Comptel, Digia, Efecte, Enfo, F-Secure, Fujitsu Finland, IBM, Knowit, Microsoft, Nixu, Tieto… Consulting Engineering A-insinöörit, Citec, Elomatic, Etteplan, FCG, Finnmap, Granlund, Neste Jacobs, Pöyry, Ramboll, Sito, SWECO, Vahanen, WSP… 11.12.2013 2
  3. 3. The Technology Industry in Finland Electronics and Electrotechnical Industry • Data communications equipment, instruments, electrical machinery • Turnover (2012): 16.3 billion euros • Personnel (30.9.2013): 46 000 Metals Industry • Steel products, non-ferrous metals, castings • Turnover (2012): 10.2 billion euros • Personnel (30.9.2013): 16 000 Information Technology Mechanical Engineering • Machinery, metal products, vehicles • Turnover (2012): 27.9 billion euros • Personnel (30.9.2013): 129 100 • IT services, applications and programming • Turnover (2012): 7.5 billion euros • Personnel (30.9.2013): 54 000 Consulting Engineering • Expertise for construction industry and infrastructure • Turnover (2012): 5.2 billion euros • Personnel (30.9.2013): 43 000 11.12.2013 3
  4. 4. The Technology Industry – the Most Important Sector in Finland • 55% of total Finnish exports. • 80% of private-sector R&D investment. • Almost 290,000 employed directly in the sector, 720,000 employed in total, equalling about 30% of the entire Finnish labour force. • The Federation of Finnish Technology Industries has some 1,600 member companies. 11.12.2013 4
  5. 5. Turnover of the Technology Industry in Finland 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 Billion euros,at current prices Metals industry Mechanical engineering Electronics and electrotechnical industry Information technology Consulting engineering 2005 2006 2007 2008 2009 Source: Statistics Finland 2010 2011 2012 11.12.2013 5
  6. 6. Export of Technology Industry Goods from Finland by Area in 2012 Total goods exports 26.5 billion euros* Western Europe 12.0 billion € 45.2 % North America 2.2 billion € 8.2 % Central and Eastern Europe 5.3 billion € 20.2 % the Middle East 0.6 billion € 2.3 % South and Central America 1.5 billion € 5.5 % Africa 0.8 billion € 3.0 % Asia 4.1 billion € 15.6 % *) In addition to goods exports the sector exports services worth about 12 billion euros. Source: National Board of Customs, Statistics Finland 11.12.2013 6
  7. 7. Turnover of the Industry and Technology Industry in Finland 150 2005 = 100 Change: 1-8, 2013 / 1-8, 2012, % 140 130 Industry -4 % 120 110 Technology industry 100 -6 % 90 80 2005 2006 2007 2008 2009 2010 2011 2012 2013 Seasonally adjusted turnover index, latest information 8/2013. Source: Statistics Finland 11.12.2013 7
  8. 8. Turnover of the Technology Industry in Finland 200 2005 = 100 Change: 1-8,2013 / 1-8,2012, % 190 180 Information technology 170 +13 % 160 Consulting engineering 150 +4 % 140 130 Mechanical engineering 120 -7 % 110 Metals industry 100 -7 % 90 80 Electronics and electrotechnical industry 70 60 -14 % 50 2005 2006 2007 2008 2009 2010 2011 2012 2013 Seasonally adjusted turnover index, latest information 8/2013. Share of total turnover in 2012: mechanical engineering 41 %, electronics and electrotechnical industry 26 %, metals industry 14 %, information technology 11 %, consulting engineering 8 %. Source: Statistics Finland 11.12.2013 8
  9. 9. Value of New Orders in the Technology Industry* in Finland 12000 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Million euros, at current prices Combined Export Domestic 2005 2006 2007 Change: Export: Domestic: Combined: 2008 2009 2010 2011 III,2013 / III,2012 -30 % +1 % -24 % 2012 2013 III,2013 / II,2013 -24 % -21 % -23 % *) Excluding metals industry. Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 2013 11.12.2013 9
  10. 10. Value of Order Books in the Technology Industry* in Finland Million euros, at current prices 24000 22000 20000 18000 Combined 16000 Export 14000 12000 10000 Domestic 8000 6000 4000 2000 0 2005 2006 2007 Change: Export: Domestic: Combined: *) Excluding metals industry. 2008 2009 2010 30.9.2013 / 30.9.2012 -12 % -3 % -10 % 2011 2012 2013 30.9.2013 / 30.6.2013 -10 % -2 % -8 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2013 11.12.2013 10
  11. 11. Change in Value of Order Books in the Technology Industry in Finland Compared with a Year Earlier 200 % Change by companies: 30.9.2013 / 30.9.2012 180 % 160 % 140 % 120 % 100 % 80 % 60 % 40 % 20 % Median: 0 % 0% Average: -10 % -20 % -40 % -60 % -80 % -100 % Companies in random order Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2013 11.12.2013 11
  12. 12. Value of New Orders in the Electronics and Electrotechnical Industry in Finland 7000 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Million euros, at current prices Combined Export Domestic 2005 2006 Change: Export: Domestic: Combined: 2007 2008 2009 2010 2011 III,2013 / III,2012 -51 % -10 % -48 % 2012 2013 III,2013 / II,2013 -42 % -11 % -39 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 2013 11.12.2013 12
  13. 13. Value of Order Books in the Electronics and Electrotechnical Industry in Finland 8000 7500 7000 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Million euros, at current prices Combined Export Domestic 2005 2006 Change: Export: Domestic: Combined: 2007 2008 2009 2010 30.9.2013 / 30.9.2012 -43 % -18 % -41 % 2011 2012 2013 30.9.2013 / 30.6.2013 -33 % -10 % -32 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2013 11.12.2013 13
  14. 14. Value of New Orders in the Mechanical Engineering in Finland 5000 Million euros, at current prices 4500 4000 3500 Combined 3000 Export 2500 2000 Domestic 1500 1000 500 0 2005 Change: Export: Domestic: Combined: 2006 2007 2008 2009 2010 2011 III,2013 / III,2012 +4 % -8 % +1 % 2012 2013 III,2013 / II,2013 0% -26 % -7 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 2013 11.12.2013 14
  15. 15. Value of Order Books in the Mechanical Engineering in Finland Million euros, at current prices 15000 14000 13000 12000 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Combined Export Domestic 2005 Change: Export: Domestic: Combined: 2006 2007 2008 2009 2010 30.9.2013 / 30.9.2012 +5 % -5 % +3 % 2011 2012 2013 30.9.2013 / 30.6.2013 +1 % +1 % +1 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2013 11.12.2013 15
  16. 16. Value of New Orders in the Consulting Engineering in Finland Million euros, at current prices 320 300 280 260 240 220 200 180 160 140 120 100 80 60 40 20 0 Combined Export Domestic 2005 Change: Export: Domestic: Combined: 2006 2007 2008 2009 2010 III,2013 / III,2012 -10 % +9 % +6 % 2011 2012 2013 III,2013 / II,2013 -23 % -4 % -7 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 2013 11.12.2013 16
  17. 17. Value of Order Books in the Consulting Engineering in Finland Million euros, at current prices 600 550 Combined 500 450 400 Export 350 300 250 Domestic 200 150 100 50 0 2005 Change: Export: Domestic: Combined: 2006 2007 2008 2009 2010 30.9.2013 / 30.9.2012 -3 % +22 % +16 % 2011 2012 2013 30.9.2013 / 30.6.2013 -13 % -3 % -5 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2013 11.12.2013 17
  18. 18. Value of New Orders in the Information Technology in Finland 800 750 700 650 600 550 500 450 400 350 300 250 200 150 100 50 0 Million euros, at current prices 2005 2006 Change: Combined: 2007 2008 2009 2010 2011 III,2013 / III,2012 +29 % 2012 2013 III,2013 / II,2013 -18 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 2013 11.12.2013 18
  19. 19. Value of Order Books in the Information Technology in Finland Million euros, at current prices 2000 1800 1600 1400 1200 1000 800 600 400 200 0 2007 Change: Combined: 2008 2009 2010 2011 2012 2013 30.9.2013 / 30.9.2012 30.9.2013 / 30.6.2013 -3 % -2 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2013 11.12.2013 19
  20. 20. Personnel in the Technology Industry Some 15 000 of employees affected by temporary or part-time lay-offs 340 000 320 000 300 000 280 000 260 000 240 000 220 000 200 000 180 000 160 000 140 000 2008 2009 Personnel in Finland 2010 2011 2012 2013 (30.9.) Personnel in subsidiaries abroad Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey 11.12.2013 20
  21. 21. Technology Industry Personnel in Finland 160 000 140 000 120 000 100 000 80 000 60 000 40 000 20 000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (30.9) Metals industry Mechanical engineering industry Information technology Electronics and Electrotechnical Industry Consulting engineering Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey 11.12.2013 21
  22. 22. Retirement of Technology Industry Personnel 9000 Individuals per year 8000 7000 6000 5000 Salaried employees 4000 3000 2000 Blue collar employees 1000 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Number of individuals retired Number of individuals retiring (estimation) Source:, Wage inquiry of the Federation of Finnish Technology Industries, Finnish Centre for Pensions, Statistics Finland 11.12.2013 22
  23. 23. Retirement of Technology Industry Blue Collar Employees 3500 Individuals per year 3000 2500 2000 1500 1000 500 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Mechanical engineering Metals industry Electronics and electrotechnical industry Source: Wage inquiry of the Federation of Finnish Technology Industries, Finnish Centre for 11.12.2013 Pensions, Statistics Finland 23
  24. 24. Situational overview and outlook • • • • • • • - Finland is in the grip of structural change. Development remains uneven between companies. - Turnover in Finland in 2012 was some EUR 67 billion. Turnover in the pre-crisis year 2008 was EUR 81 billion. - The monetary value of new orders in July-September was 24 % lower than in the corresponding period of 2012, and 23 % lower than at the level of the preceding quarter. - At the end of September, the value of order books was 10 % lower year on year, and 8 % lower the value reported at the end of June. - The turnover of technology industry companies could fall by as much as 10 per cent year-on-year, being significantly lower than in the times preceding the 2008 financial crises. - Since 2008, personnel numbers in Finland have shrunk by 30,000 employees, totalling 288,000 at the end of September. - Small and medium-sized enterprises in particular have reported weak development in profitability. 11.12.2013 24
  25. 25. European recovery will take time 11.12.2013 25
  26. 26. Industrial Production Volume Industrial production volume in EU countries 10 %, but in Finland 19 % lower since early 2008 110 2008=100 105 USA 100 95 EU28 countries 90 Japan 85 80 Finland 75 70 65 2008 2009 2010 2011 2012 2013 Seasonally adjusted volume index, latest information 9/2013 or 10/2013. Source: Eurostat, Federal Reserve (USA), Statistics Bereau and Statistics Center 11.12.2013 (Japan) 26
  27. 27. Industrial Production Volume in EU Countries 125 2008=100 120 Poland 115 Estonia 110 Belgium 105 Austria 100 Germany 95 Sweden 90 Finland 85 Italy 80 Spain 75 70 2008 2009 2010 2011 2012 Seasonally adjusted volume index, latest information 9/2013. Source: Eurostat 2013 11.12.2013 27
  28. 28. The Share of Industry in GDP in Finland 1900-2012 35% 30% 25% 20% 15% 10% 5% 0% Industry Source: Statistics Finland Industry + service sectors in the technology industry 11.12.2013 28
  29. 29. Breakdown of World Industrial Production % 50 45 40 Asia 35 30 North America 25 20 15 Europe 10 5 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Purchasing power parity adjusted shares. Source: Maddison (Historical Statistics), IMF and ETLA 11.12.2013 29
  30. 30. Industrial Production Development by Year 320 China 300 280 Korea 260 India 240 Russia 220 200 Finland 180 Brazil 160 140 USA 2005=100 120 Euroarea 100 Japan 80 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2014e Source: Consensus Economics 11.12.2013 30
  31. 31. Almost all Western Countries have Excessive Public Debt Public debt / GDP, % 210 200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 Greece Italy Irland Portugal USA Belgium Germany Spain Finland Sweden 2005 2006 2007 2008 2009 2010 2011 2012e 2013e 2014e Source: OECD, Economic Outlook, May 2013 11.12.2013 31
  32. 32. The Big Challenge for Finland after 2008 11.12.2013 32
  33. 33. Finnish Exports up to EUR 20 – 30 Billion Short of Annual Target Level 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 Export of goods and services by quarter, billion euros, at current prices Exports needed to avoid extra running into debt in the public sector Exports, realized 2005 2006 2007 2008 2009 2010 Working day and seasonally adjusted index. Latest information April-June 2013. Source: Statistics Finland 2011 2012 2013 11.12.2013 33
  34. 34. Finnish Exports lagging Behind Competitors 230 Export of goods and services by quarter, billion euros, at current prices, index 220 210 Estonia 200 190 Poland 180 Chech Republic Germany 170 160 Netherlands 150 Belgium 140 130 Sweden 120 Finland 110 100 2005,I = 100 90 2005 2006 2007 2008 2009 2010 Working day and seasonally adjusted index. Latest information April-June 2013. Source: Eurostat 2011 2012 2013 11.12.2013 34
  35. 35. Finland not attracting Companies’ Investment Companies’ Fixed Investments in Different Countries Indeksi, 2005=100 135 Germany 130 125 Switzerland 120 Sweden 115 110 USA 105 Belgium 100 95 Finland 90 2005 2006 2007 2008 2009 2010 2011 2012e Source: OECD, Economic Outlook, May 2013 2013e 2014e 11.12.2013 35
  36. 36. Unit Labour Costs at the National Economy Level (Including the Effective Exchange Rates) 120 2005,I =100 115 Finland’s cost competitiveness declines 110 105 Finland’s cost competitiveness improves 100 95 90 2005 2006 2007 Compared to Germany Compared to the Netherlands 2008 2009 2010 Compared to Spain Compared to Austria 2011 2012 2013 Compared to Italy Compared to Finland *) In the ECB Harmonised Competitiveness Index, the average effective exchange rate of each country is calculated vis-à-vis 20 to 30 main trade partners, as well as the development of unit labour costs for the total economy Latest information II/2013. 36 11.12.2013 Source: European Central Bank
  37. 37. What should be done? • Support the renewal of the industry • Taxes should support growth and investment in Finland • Support decision making in companies related to compensation and working time • No new European nor national burdens on companies, which are deteriorating the competitiveness 11.12.2013 37
  38. 38. Long-Term Outlook and Challenges • Global Structural Change Set to Continue Apace – Industrial production and services will relocate to rapidly developing economic areas – Strong growth, large markets, cheap labour and increasing expertise will increase the attractiveness of these regions. • Competition over Skills and Raw Materials Set to Increase – Due to an increase in retirement, the sector’s annual recruitment need in Finland will rise considerably in the coming years. – The availability of reasonably-priced energy also threatens to become an investment bottleneck in Finland • Combating Climate Change – A challenge as costs are set to grow faster than in competitor countries – An opportunity for new environmental and energy technologies 11.12.2013 38

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