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Finnish technology industry, January 2017

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Economic outlook: Finnish technology industry and economy, monthly statistics

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Finnish technology industry, January 2017

  1. 1. Technology Industry / Finnish Economic Outlook January 2017 11/3/2017 Technology Industries of Finland
  2. 2. The Finnish Technology Industry Is Comprised of Five Sub-Sectors 21/3/2017 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 (2015): 14.6 billion euros • Personnel (2015): 40,600 METALS INDUSTRY • Steel products, non-ferrous metals, castings, metallic minerals • Turnover (2015): 9.1 billion euros • Personnel (2015): 15,800 MECHANICAL ENGINEERING • Machinery, metal products, vehicles • Turnover (2015): 28 billion euros • Personnel (2015): 124,600 INFORMATION TECHNOLOGY • IT services, applications and programming • Turnover (2015): 11 billion euros • Personnel (2015): 59,300 CONSULTING ENGINEERING • Expertise for construction industry and infrastructure • Turnover (2015): 5.5 billion euros • Personnel (2015): 48,200 1/3/2017 Technology Industries of Finland
  4. 4. The Technology Industry – the Largest Export Sector in Finland 4 • 51 % of total Finnish exports. • Companies invest about EUR 5.5 billion annually in Finland. • 75 % of private-sector R&D investment. • Almost 280,000 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. 1/3/2017 Technology Industries of Finland
  5. 5. Turnover of the Technology Industry in Finland 5Source: Macrobond, Statistics Finland1/3/2017 Technology Industries of Finland
  6. 6. 6*) In addition to goods exports the sector exported services worth some 12.3 billion euros. Source: National Board of Customs, Statistics Finland Export of Technology Industry Goods from Finland by Area in 2015 Total goods exports 26.7 billion euros* North America 2.6 billion € Western Europe 14.4 billion € 53.7 % South and Middle America 0.9 billion € 3.3 % Central and Eastern Europe 3.8 billion € 14.6 % Africa 0.5 billion € 1.9 % Middle and Central East 0.7 billion € 2.5 % Asia 3.8 billion € 14.4 % 1/3/2017 Technology Industries of Finland
  7. 7. Turnover of the Industry and Technology Industry in Finland 7Source: Macrobond, Statistics Finland1/3/2017 Technology Industries of Finland
  8. 8. Turnover of the Technology Industry in Finland 8Source: Macrobond, Statistics Finland1/3/2017 Technology Industries of Finland
  9. 9. Value of New Orders in the Technology Industry* in Finland 9Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 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 Combined Export Domestic 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: III,2016 / III,2015 III,2016 / II,2016 Export: -11 % +3 % Domestic: +11 % -1 % Combined: -6 % +1 % *) Excluding metals industry and game industry companies Technology Industries of Finland 1/3/2017
  10. 10. Value of Order Books in the Technology Industry* in Finland 10Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2016 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 Export Domestic 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: 30.9.2016 / 30.9.2015 30.9.2016 / 30.6.2016 Export: 0 % +1 % Domestic: -2 % -4 % Combined: -1 % 0 % *) Excluding metals industry and game industry companies Combined Technology Industries of Finland 1/3/2017
  11. 11. Value of New Orders in the Electronics and Electrotechnical Industry in Finland 12 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 2016 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 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: III,2016 / III,2015 III,2016 / II,2016 Export: +15 % +2 % Domestic: +45 % +17 % Combined: +20 % +5 % Technology Industries of Finland 1/3/2017
  12. 12. Value of Order Books in the Electronics and Electrotechnical Industry in Finland 13 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2016 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 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: 30.9.2016 / 30.9.2015 30.9.2016 / 30.6.2016 Export: +14 % +1 % Domestic: +48 % +16 % Combined: +20 % +4 % Combined Technology Industries of Finland 1/3/2017
  13. 13. Value of New Orders in the Mechanical Engineering in Finland 14 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2016 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 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: III,2016 / III,2015 III,2016 / II,2016 Export: -30 % +2 % Domestic: +16 % -13 % Combined: -23 % -2 % Technology Industries of Finland 1/3/2017
  14. 14. Value of Order Books in the Mechanical Engineering in Finland 15 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2016 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 14,000 15,000 16,000 Export Domestic 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: 30.9.2016 / 30.9.2015 30.9.2016 / 30.6.2016 Export: -5 % +1 % Domestic: -11 % -11 % Combined: -6 % -2 % Combined Technology Industries of Finland 1/3/2017
  15. 15. Value of New Orders in the Consulting Engineering in Finland 16 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 0 50 100 150 200 250 300 350 Combined Export Domestic 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: III,2016 / III,2015 III,2016 / II,2016 Export: +341 % +221 % Domestic +13 % -15 % Combined: +41 % +6 % Technology Industries of Finland 1/3/2017
  16. 16. Value of Order Books in the Consulting Engineering in Finland 17 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent comnpanies, latest information 30.9.2016. 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 Export Domestic 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: 30.9.2016 / 30.9.2015 30.9.2016 / 30.6.2016 Export: +54 % +59 % Domestic: +8 % -1 % Combined: +15 % +8 % Combined Technology Industries of Finland 1/3/2017
  17. 17. Value of New Orders in the Information Technology in Finland 18 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 2016 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: III,2016 / III,2015 III,2016 / II,2016 Combined: -22 % -5 % Technology Industries of Finland 1/3/2017
  18. 18. Value of Order Books in the Information Technology* in Finland 19 Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2016 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 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Million euros, at current prices Change: 30.9.2016 / 30.9.2015 30.9.2016 / 30.6.2016 Combined: -6 % -1 % *) Excluding game industry companies Technology Industries of Finland 1/3/2017
  19. 19. Technology Industry Personnel in Finland and Abroad 20Source: 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 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (30.9) Personnel in Finland Personnel in subsidiaries abroad Some 12,000 of personnel affected by temporary or part-time lay-offs 30.9.2016 Technology Industries of Finland 1/3/2017
  20. 20. Technology Industry Personnel in Finland by Branch 211/3/2017 Technology Industries of Finland (30.9) Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond
  21. 21. Technology Industry Personnel in Subsidiaries Abroad by Branch 221/3/2017 Source: The Federation of Finnish Technology Industries’ labour force surveyTechnology Industries of Finland
  22. 22. Retirement of Technology Industry Personnel in Finland 23 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 1/3/2017
  23. 23. Retirement of Technology Industry Blue Collar Employees in Finland 24 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 1/3/2017
  24. 24. Overview of the Situation in the Technology Industry and Outlook for winter 2016/2017 25 - Finland is in the grip of structural change. Development remains uneven between companies. - Turnover in Finland increased slihtly in 2015 compared to the year 2014. Turnover totalled EUR 68.2 billion. In the pre-crisis year 2008 it was EUR 86 billion. - The monetary value of new orders reported between July-September 2016 was 6 % lower than in the corresponding period in 2015, but slightly higher than in the preceding quarter. - At the end of September, the value of order books was slightly lower year-on-year, but at the same level reported at the end of June. - The turnover of technology industry companies is expected to remain at the same level in the winter of 2016/2017 than in the corresponding period year earlier. - Since 2008, personnel numbers in Finland have shrunk by 43,000 employees, totalling on average 283,000 at the end of September 2016. 1/3/2017 l Technology Industries of Finland
  25. 25. World Economic Outlook - Finland as a Part of Global Economy 261/3/2017 Technology Industries of Finland
  26. 26. GDP Has Grown in Europe and the USA, but only Slightly in Finland 271/3/2017 Lähde: MacrobondTechnology Industries of Finland
  27. 27. 281/3/2017 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
  28. 28. 291/3/2017 Latest information December 2016 Source: Markit GDP Growth Has Continued in Eurozone in November-December 2016 Purchase Managers’ Index (PMI), 50 = no change from previous month Technology Industries of Finland
  29. 29. Industrial Production Volume 301/3/2017 Source: MacrobondTechnology Industries of Finland
  30. 30. Industrial Production Volume in the EU Countries 311/3/2017 Source: MacrobondTechnology Industries of Finland
  31. 31. Industrial Production is Growing in Emerging Countries 321/3/2017 Source: Macrobond, The CPB Netherlands Bureau for Economic Policy AnalysisTechnology Industries of Finland
  32. 32. 331/3/2017 Latest information November 2016 Source: Markit Industrial Production in China is Increasing Purchase Managers’ Index (PMI) in manufacturing industry in China Technology Industries of Finland
  33. 33. 341/3/2017 Latest information December 2016 Source: Markit Industrial Production in Russia is Growing Purchase Managers’ Index (PMI) in manufacturing industry in China Technology Industries of Finland
  34. 34. 351/3/2017 Latest information November 2016 Source: Markit Industrial Production in Brazil is Dropping Purchase Managers’ Index (PMI) in manufacturing industry in China Technology Industries of Finland
  35. 35. 36Source: Macrobond Industrial Production in USA is Slightly Increasing Purchase Managers’ Index (PMI) in manufacturing industry 50 = no change from previous month Technology Industries of Finland 1/3/2017
  36. 36. 37Source: Macrobond Growth of Residence Construction Has Lowered in China Share of China in Asian GDP is 42% (adjusted for PP) Technology Industries of Finland 1/3/2017
  37. 37. 38Souce: Macrobond Fixed Investments in Russia and Brazil are Falling 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 1/3/2017
  38. 38. 39Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis Global Trade is Developing Sluggish Import volume development Technology Industries of Finland 1/3/2017
  39. 39. Import to China Has Reduced from Several Countries 40Source: MacrobondTechnology Industries of Finland 1/3/2017
  40. 40. Exports from EU Countries to Russia Have Fallen, but Stabilized 41Source: MacrobondTechnology Industries of Finland 1/3/2017
  41. 41. Russia’s Share* of Technology Industry Exports from Finland Has Lowered to Some Five Per Cent 42*) 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(1-9) Technology Industries of Finland 1/3/2017
  42. 42. 43Lähde: IMF (July 2016) Global Economy is Was Expected to Grow by 3.1 % in 2016 GDP growth in 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 Restof EasternEurope Russia Brazil Mexico Restof LatinAmerica MiddleEast andAfrica Average growth: +3,1 % The width of the bar indicates the share of global GDP in 2015 (adjusted for purchasing power parity), % Rest of Asia Technology Industries of Finland 1/3/2017
  43. 43. 44Source: IMF (July 2016), Board of Customs Export Demand for Technology Industry in Finland Grew by 2.0 % in 2016 GDP growth 2016 / 2015, % -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: +2.0 % Mexico The width of the bar indicates the export share of technology industry from Finland in 2015, % Technology Industries of Finland 1/3/2017
  44. 44. Finland’s Economic Growth Relies on Exports and Investments 45Technology Industries of Finland 1/3/2017
  45. 45. Technology-, Forest- and Chemical Industry Cover 81 % of Finnish Export Revenues Goods and services exports: billion euros and the shares of Finnish exports 2015 46Source: Board of Customs, Statistics Finland (National Accounts, Foreign Trade of Services) Technology industry 39.06 billion € 51% Forest industry 11.96 billion € 16% Chemical industry 10.92 billion € 14% Other branches 14.639 billion € 19% Technology industry Forest industry Chemical industry Other branches Technology Industries of Finland 1/3/2017
  46. 46. 47Source: Macrobond, Eurostat Finnish Exports up to EUR 30 Billion Short of Annual Target Level Technology Industries of Finland 1/3/2017
  47. 47. Finnish Exports Lagging Behind Competitors 48Source: Macrobond, EurostatTechnology Industries of Finland 1/3/2017
  48. 48. Finland’s Industrial Production and Exports Will Not Regain the Level of 2008 with the Present Production Capacity Finland’s production capacity has decreased by 20 % 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 -21 % 2008 2009 2010 2011 2012 2013 2014 2015 2016 -21 % Source: Statistics Finland / National Accounts, Industrial volume indexTechnology Industries of Finland 1/3/2017
  49. 49. 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 1/3/2017
  50. 50. Upswing of Investments Recuired in Finland of Investments Required in Finland 511/3/2017 Source: OECD, Economic Outlook 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 2015e 2016e 2017e Corporate sector fixed investments, index 2005=100 Sweden the Netherlands USA Germany Switzerland Finland Technology Industries of Finland
  51. 51. 52Source: Statistics Finland (National Accounts, Confederation of Finnish Industries’ Investment Survey (June 2016) 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 Manufacturing industry Technology industry, including information technology and consulting engineering Million euros, at current prices Technology Industries of Finland 1/3/2017
  52. 52. 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 1/3/2017
  53. 53. 54*) 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/2016. Source: European Central Bank Cost Competitiveness in Finland is Still 17 % Waker than in Other Euro Countries 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 Finland compared to the Eurozone, actual change The Competitiveness Pact + moderate wage increases in the coming years Government's objective for improving the cost competitiveness Finland’s cost competitiveness declines Finland’s cost competitiveness improves 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2005,I =100 1/3/2017 Technology Industries of Finland
  54. 54. 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 1/3/2017
  55. 55. 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 1/3/2017
  56. 56. Technology Industries of Finland 57Teknologiateollisuus1/3/2017
  57. 57. 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 1/3/2017
  58. 58. 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 1/3/2017 Technology Industries of Finland

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