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Finnish technology industry, April 2017

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Economic outlook: Finnish technology industry and economy, monthly statistics

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Finnish technology industry, April 2017

  1. 1. Technology Industry / Finnish Economic Outlook April 2017 14/13/2017 Technology Industries of Finland
  2. 2. The Finnish Technology Industry Is Comprised of Five Sub-Sectors 24/13/2017 Technology Industries of Finland ELEKTRONICS AND ELECTROTECHNICAL INDUSTRY ABB, Ensto, Microsoft Mobile, Murata Electronics, Nokia, Planmeca, Polar Electro, Suunto, Vacon, Vaisala… METALS INDUSTRY Boliden, Componenta, Kuusakoski, Luvata, Outokumpu, Outotec, Ovako, Sacotec, SSAB … MECHANICAL ENGINEERING Abloy, Cargotec, Finn-Power, Fiskars, Glaston, Kone, Konecranes, Metso, Meyer Turku, Normet, Oras, Patria, Pemamek, Ponsse, Stala, Valmet, Valtra, Wärtsilä… INFORMATION TECHNOLOGY Affecto, Basware, Bilot, CGI, Comptel, Digia, Efecte, Enfo, F-Secure, Fujitsu Finland, IBM, Innofactor, Knowit, Microsoft, Nixu, Tieto… CONSULTING ENGINEERING A-Insinöörit, Citec, Elomatic, Etteplan, FCG, Granlund, Neste Jacobs, Pöyry, Ramboll, Rejlers, SITO, SWECO, WSP…
  3. 3. The Finnish Technology Industry Is Comprised of Five Sub-Sectors 3 ELEKTRONICS AND ELECTROTECHNICAL INDUSTRY • Data communications equipment, electrical machinery, medical technology • Turnover (2016): 14.3 billion euros • Personnel (2016): 38,000 METALS INDUSTRY • Steel products, non-ferrous metals, castings, metallic minerals • Turnover (2016): 8.7 billion euros • Personnel (2016): 15,400 MECHANICAL ENGINEERING • Machinery, metal products, vehicles • Turnover (2016): 28.2 billion euros • Personnel (2016): 122,400 INFORMATION TECHNOLOGY • IT services, applications and programming • Turnover (2016): 11.4 billion euros • Personnel (2016): 60,400 CONSULTING ENGINEERING • Expertise for construction industry and infrastructure • Turnover (2016): 6.0 billion euros • Personnel (2016): 49,800 4/13/2017 Technology Industries of Finland
  4. 4. The Technology Industry – the Largest Export Sector in Finland 4 • 50 % of total Finnish exports. • Companies invest about EUR 5.5 billion annually in Finland. • 70 % of private-sector R&D investment. • Almost 290,000 employed directly in the sector, 700,000 employed in total, equalling about 30% of the entire Finnish labour force. • Technology Industries of Finland has over 1,600 member companies. 4/13/2017 Technology Industries of Finland
  5. 5. Turnover of the Technology Industry in Finland 5Source: Macrobond, Statistics Finland, Technology Industries of Finland4/13/2017 Technology Industries of Finland
  6. 6. 6*) In addition to goods exports the sector exported services worth some 12.3 billion euros (2015). Source: National Board of Customs, Statistics Finland Export of Technology Industry Goods from Finland by Area in 2016 Total goods exports 25.2 billion euros* North America 2.5 billion € 9.8 % Western Europe 13.7 billion € 53.9 % South and Middle America 0.8 billion € 3.2 % Central and Eastern Europe 3.8 billion € 15.0 % Africa 0.4 billion € 1.7 % Middle and Central East 0.5 billion € 1.8 % Asia 3.7 billion € 14.6 % 4/13/2017 Technology Industries of Finland
  7. 7. Technology, Forest and Chemical Industries Provide 80 % of Finland's Goods and Services Exports Revenue Goods and service exports: billion euros and the share of Finnish exports in 2016* 7*) Service exports industry-specific data for the year 2015. Source: Board of Customs, Statistics Finland (National Accounts, Foreign trade in services) Technology industry 50% Forest industry 15% Chemical industry 15% Other sectors 20% 4/13/2017 Technology Industries of Finland
  8. 8. Turnover of the Industry and Technology Industry in Finland 8Source: Macrobond, Statistics Finland4/13/2017 Technology Industries of Finland
  9. 9. Turnover of the Technology Industry in Finland 9Source: Macrobond, Statistics Finland4/13/2017 Technology Industries of Finland
  10. 10. Value of New Orders in the Technology Industry* in Finland 10Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation October-December 2016 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 Combined Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: IV,2016 / IV,2015 IV,2016 / III,2016 Export: -2 % +20 % Domestic: 0 % +30 % Combined: -1 % +23 % *) Excluding metals industry and game industry companies Technology Industries of Finland 4/13/2017
  11. 11. Value of Order Books in the Technology Industry* in Finland 11Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation 31.12.2016 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 Domestic Export 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: 31.12.2016 / 31.12.2015 31.12.2016 / 30.9.2016 Export: -3 % +2 % Domestic: -7 % +1 % Combinedä: -4 % +2 % *) Excluding metals industry and game industry companies Combined Technology Industries of Finland 4/13/2017
  12. 12. Tender Requests* Received by Technology Industry Companies in Finland 12 *) Have you experienced a notable increase or decrease in the number of requests for tenders in recent weeks in comparison to the situation three months ago?”. Balance figure = the number of companies receiving more requests - the number of companies receiving less requests. Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation January 2017 -60 -50 -40 -30 -20 -10 0 10 20 30 40 Balance figure 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Technology Industries of Finland 4/13/2017
  13. 13. Value of New Orders in the Electronics and Electrotechnical Industry in Finland 13 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 Combined Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: IV,2016 / IV,2015 IV,2016 / III,2016 Export: -5 % +16 % Domestic: -21 % -8 % Combined: -9 % +11 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation October-December 2016 Technology Industries of Finland 4/13/2017
  14. 14. Value of Order Books in the Electronics and Electrotechnical Industry in Finland 14 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 Export Domestic Million euros, at current prices Change: 31.12.2016 / 31.12.2015 31.12.2016 / 30.9.2016 Export: -2 % +9 % Domestic: -15 % -15 % Combined: -4 % +4 % Combined 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation 31.12.2016 Technology Industries of Finland 4/13/2017
  15. 15. Value of New Orders in the Mechanical Engineering in Finland 15 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 Combined Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: IV,2016 / IV,2015 IV,2016 / III,2016 Export: +1 % +26 % Domestic: +22 % +55 % Combined: +6 % +32 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation 31.12.2016 Technology Industries of Finland 4/13/2017
  16. 16. Value of Order Books in the Mechanical Engineering in Finland 16 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 Export Domestic Million euros, at current prices Change: 31.12.2016 / 31.12.2015 31.12.2016 / 30.9.2016 Export: -4 % 0 % Domestic: -7 % +5 % Combined: -4 % +1 % Combined 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation 31.12.2016 Technology Industries of Finland 4/13/2017
  17. 17. Value of New Orders in the Consulting Engineering in Finland 17 0 50 100 150 200 250 300 350 Combined Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Muutos: IV,2016 / IV,2015 IV,2016 / III,2016 Vientiin: +9 % -62 % Kotimaahan: +13 % +22 % Yhteensä: +13 % -2 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation October-December Technology Industries of Finland 4/13/2017
  18. 18. Value of Order Books in the Consulting Engineering in Finland 18Source: The Federation of Finnish Technology Industries’ order book survey’s respondent comnpanies, last observation 31.12.2016 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: 31.12.2016 / 31.12.2015 31.12.2016 / 30.9.2016 Export: +67 % -1 % Domestic: +4 % +1 % Combined: +14 % 0 % Combined Technology Industries of Finland 4/13/2017
  19. 19. Value of New Orders in the Information Technology in Finland 19 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: IV,2016 / IV,2015 IV,2016 / III,2016 Combined: -2 % +52 % Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation October-December 2016 Technology Industries of Finland 4/13/2017
  20. 20. Value of Order Books in the Information Technology* in Finland 20 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: 31.12.2016 / 31.12.2015 31.12.2016 / 30.9.2016 Combined: -6 % +5 % *) Excluding game industry companies Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, last observation 31.12.2016 Technology Industries of Finland 4/13/2017
  21. 21. Technology Industry Personnel in Finland and Abroad 21Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey 150,000 170,000 190,000 210,000 230,000 250,000 270,000 290,000 310,000 330,000 350,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 Personnel in Finland Personnel in subsidiaries abroad Some 11,000 of personnel affected by temporary or part-time lay-offs 31.12.2016 Technology Industries of Finland 4/13/2017
  22. 22. Technology Industry Personnel in Finland by Branch 22Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond4/13/2017 Technology Industries of Finland
  23. 23. Technology Industry Personnel in Subsidiaries Abroad by Branch 234/13/2017 Source: The Federation of Finnish Technology Industries’ labour force surveyTechnology Industries of Finland
  24. 24. Retirement of Technology Industry Personnel in Finland 24 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Number of individuals retired Number of individuals retiring (estimation) Salaried employees Blue collar employees Individuals per year Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics FinlandTechnology Industries of Finland 4/13/2017
  25. 25. Retirement of Technology Industry Blue Collar Employees in Finland 25 0 500 1000 1500 2000 2500 3000 3500 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Mechanical engineering Metals industry Electronics and electrotechnical industry Individuals per year Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics FinlandTechnology Industries of Finland 4/13/2017
  26. 26. Overview of the Situation in the Technology Industry and Outlook for Early 2017 26 - Turnover in Finland totalled some EUR 68.7 billion in 2016. This is about half per cent higher than in 2015. In January 2017 turnover was 14 % higher than last year at the same time. In 2008, prior to the financial crises, the corresponding figure was EUR 86 billion. - The monetary value of new orders reported between October-December 2016 was 23 % higher than in July-September, but slightly lower than in the corresponding period in 2015. - At the end of December, the value of order books was two per cent higher than at the end of September, but four per cent lower than in December 2015. - The turnover of technology industry companies in early 2017 is expected to be higher than in the corresponding period last year. - The number of personnel in Finland continued to fall slightly in 2016. Personnel declined by some one per cent, or by 2,500 employees from the average number in 2015. On average, the industry employed 286,000 people in 2016. In 2008, the industry employed a total of 326,000 people in Finland. 4/13/2017 l Technology Industries of Finland
  27. 27. World Economic Outlook - Finland as a Part of Global Economy 274/13/2017 Technology Industries of Finland
  28. 28. GDP Has Grown in Europe and the USA, but only Slightly in Finland 284/13/2017 Lähde: MacrobondTechnology Industries of Finland
  29. 29. 294/13/2017 Lähde: Macrobond Growth is Lowering in China, Remaining Fast in India, Recession Continues in Brazil Share of global GDP in China, Brazil and Russia is 23%, in China 16% (adjusted for PP) Technology Industries of Finland
  30. 30. 304/13/2017 Latest information March 2017 Source: Markit GDP Growth in the Euro Area Has Picked up During the last Months Purchase Managers’ Index (PMI), 50 = no change from previous month Technology Industries of Finland
  31. 31. Industrial Production Volume 314/13/2017 Source: MacrobondTechnology Industries of Finland
  32. 32. Industrial Production Volume in the EU Countries 324/13/2017 Source: MacrobondTechnology Industries of Finland
  33. 33. Industrial Production is Growing in Particular in Emerging Countries 334/13/2017 Source: Macrobond, The CPB Netherlands Bureau for Economic Policy AnalysisTechnology Industries of Finland
  34. 34. 344/13/2017 Latest information March 2017 Source: Markit Industrial Production in China is Growing Purchase Managers’ Index (PMI) in manufacturing industry in China Technology Industries of Finland
  35. 35. 354/13/2017 Latest information March 2017 Source: Markit Industrial Production in Russia is Growing Purchase Managers’ Index (PMI) in manufacturing industry in China Technology Industries of Finland
  36. 36. 364/13/2017 Latest information March 2017 Source: Markit Industrial Production in Brazil Will Not Diminish Much Longer is Decreasing Purchase Managers’ Index (PMI) in manufacturing industry in China Technology Industries of Finland
  37. 37. 37Source: Macrobond Industrial Production in USA is Growing Purchase Managers’ Index (PMI) in manufacturing industry 50 = no change from previous month Technology Industries of Finland 4/13/2017
  38. 38. 38Source: Macrobond Growth of Residence Construction Has Lowered in China Share of China in Asian GDP is 42% (adjusted for PP) Technology Industries of Finland 4/13/2017
  39. 39. 39Souce: Macrobond Fixed investment in Brazil Continue to Decrease Share of Russia in European GDP is 13 % (adjusted for PP) Share of Brazil in Latin American GDP is 35 % (adjusted for PP) Technology Industries of Finland 4/13/2017
  40. 40. 40Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis World Trade Has Picked up Again Import volume development Technology Industries of Finland 4/13/2017
  41. 41. Imports to China Have Again Increased from Several Countries 41Source: MacrobondTechnology Industries of Finland 4/13/2017
  42. 42. Exports from EU Countries to Russia Have Fallen, but Stabilized 42Source: MacrobondTechnology Industries of Finland 4/13/2017
  43. 43. Russia’s Share* of Technology Industry Exports from Finland Lowered to Some Five Per Cent During 2015-2016 43*) Soviet Union up to 1991 Source: Finnish Customs 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Technology Industries of Finland 4/13/2017
  44. 44. 44Source: IMF (January 2017) Global Economy is Expected to Grow by 3,4 % in 2017 GDP growth in 2017, % -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 0 10 20 30 40 50 60 70 80 90 100 North America Western Europe Japan China India Restof EasternEurope Russia Brazil Mexico RestofLatin A,merica MiddleEast andAfrica Average growth: +3,4 % The width of the bar indicates the share of global GDP in 2015 (adjusted for purchasing power parity), % Rest of Asia 4/13/2017 Technology Industries of Finland
  45. 45. 45Source: IMF (January 2017), Board of Customs Demand in the Finnish Technology Industry Export Market is Expected to Grow by 2.2 % in 2017 GDP growth 2017 / 2016, % -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 0 10 20 30 40 50 60 70 80 90 100 North America Western Europe Japan China India Rest of Asia Restof EasternEurope Russia Brazil RestofLatinAmerica MiddleEastandAfrica Average growth: +2.2 % Mexico The width of the bar indicates the export share of technology industry from Finland in 2015, % 4/13/2017 Technology Industries of Finland
  46. 46. Finland’s Economic Growth Relies on Exports and Investments 46Technology Industries of Finland 4/13/2017
  47. 47. 47Source: Macrobond, Eurostat Finnish Exports up to EUR 30 Billion Short of Annual Target Level Technology Industries of Finland 4/13/2017
  48. 48. Finnish Exports Lagging Behind Competitors 48Source: Macrobond, EurostatTechnology Industries of Finland 4/13/2017
  49. 49. Export Growth is Limited Because Industrial Production Has Decreased by 20% Investments are vital for the production and export recovery 49 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% 70 75 80 85 90 95 100 105 110 115 120 125 Industrial production ability (production with capacity in full use), left. Scale Industrial production (2008=100), left scale Capacity utilization rate, %, right scale -20 % 2008 2009 2010 2011 2012 2013 2014 2015 2016 -20 % Source: Statistics Finland / National Accounts, Industrial volume indexTechnology Industries of Finland 4/13/2017
  50. 50. 50Source: Macrobond, Eurostat Growth of Public Expenditures, Debt and Tax Ratio in Finland Increased cost burden requires cuts to public sector Technology Industries of Finland 4/13/2017
  51. 51. Business Investment in Finland Should Grow more Strongly than Predicted, the Current Development Is Inadequate 51Source: OECD, Economic Outlook (November 2016) 85 90 95 100 105 110 115 120 125 130 135 140 145 150 155 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017e 2018e Corporate sector fixed investments, index 2005=100 Sweden the Netherlands USA Germany Switzerland Finland Technology Industries of Finland 4/13/2017
  52. 52. 52Source: Statistics Finland (National Accounts, Confederation of Finnish Industries’ Investment Survey (February 2017) Industrial and Technology Industry Companies’ Investment Plans Indicate a Weak Economic Growth Industrial fixed and R&D investments in Finland 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017e Manufacturing industry Technology industry, including information technology and consulting engineering Million euros, at current prices Technology Industries of Finland 4/13/2017
  53. 53. Investments and productivity* are Decisive for Finland’s Success Productivity of export sector is 10 % lower than in 2007-2008, productivity of entire national economy is 3 % lower 53 *) Productivity is measured as real value added per hours worked. When productivity grows (the curve rises) value added grows more than hours worked. Value added = turnover – purchasing of materials and services Value added = labour costs + rents + depreciations + profits Source: Statistics Finland / National Accounts Technology Industries of Finland 4/13/2017
  54. 54. 54*) In the ECB Harmonised Competitiveness Index, the average effective exchange rate of each country is calculated vis-à-vis 38 main trade partners, as well as the development of unit labour costs for the total economy. Latest information October-December 2016. Source: European Central Bank Price and Cost Competitiveness in Finland Is still 14 % Waker than in Germany Compared to 2005 Unit labour costs in the whole economy = labour costs / productivity, including the influence of effective exchange rates 90 95 100 105 110 115 120 125 Compared to Austria Compared to Belgium Compared to Germany Compared to Spain Compared to Finland Compared to France Compared to Italy Compared to the Netherlands Compared to Portugal 2005,I =100 Finland’s price and cost competitiveness declines Finland’s price and cost competitiveness improves 4/13/2017 Technology Industries of Finland 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
  55. 55. What Should Be Done in Finland? 55 • 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. Technology Industries of Finland 4/13/2017
  56. 56. Long-Term Outlook and Challenges 56 • Global Structural Change Set to Continue Apace o Industrial production and services will relocate to rapidly developing economic areas o 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 o Due to an increase in retirement, the sector’s annual recruitment need in Finland will rise considerably in the coming years. o The availability of reasonably-priced energy also threatens to become an investment bottleneck in Finland • Combating Climate Change o A challenge as costs are set to grow faster than in competitor countries o An opportunity for new environmental and energy technologies Technology Industries of Finland 4/13/2017
  57. 57. Technology Industries of Finland 57Teknologiateollisuus4/13/2017
  58. 58. The Federation’s Member Companies 2015 58 250–499 employees 71,006 39% 27,628 15% 25,925 14% 57,540 32% 1,438 92 % 77 5 % 38 2 % 24 1 % Number of enteprises / 1 577 Number of personnel / 182 099 1–249 employees 500–999 employees 1000– employees Technology Industries of Finland 4/13/2017
  59. 59. The Federation’s SME Member Companies 2015 59 493 34% 473 33 % 272 19% 200 14% Number of enterprises / 1 438 Number of personnel / 71 006 5,131 7% 15,060 21% 19,069 27% 31,746 45% 1–19 employees 20–49 employees 50–99 employees 100–249 employees 4/13/2017 Technology Industries of Finland

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