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Fast Comment FinlandWeakening trend in the Finnish industry growth continued in October

  1. Industrial output grew by 0.8 percent y-o-y but contracted by 2.5 percent m-o-m in October
  2. The electrical and electronics industry a bright spot, other main sectors were weak
  3. The underlying trend in Finnish industry has weakened, yet new orders brighten the near term outlook
Industrial output grew by 0.8 percent y-o-y but contracted by 2.5 percent m-o-m in October
According to Statistics Finland, industrial output adjusted for working days was 0.8 percent higher in October 2018 compared to October 2017. Seasonally adjusted output decreased by 2.5 percent from September. In manufacturing (i.e. industrial output excluding mining and quarrying and electricity, gas, steam and air conditioning supply), output increased by 0.9 percent y-o-y and fell by 2.8 percent m-o-m which means that the October’s monthly contraction more than offset the monthly gain of 2.3 percent seen in September. All in all, the growth in the industry output has gradually weakened this year.
The electrical and electronics industry a bright spot, other main sectors were weak
Compared to previous month, output fell most in mining and quarrying, by 9.3 percent, and in the chemical industry, output diminished by 1.0 percent. In forest industry output increased by a meagre 0.3 percent m-o-m. The forest sector is weighed down by the weak performance in the mechanical forest industry. Output of paper and paper products (including pulp) has remained in growth territory, lifting the level of production by some 5 percent from previous year. In aggregate, metal industry output contracted by 2.9 percent m-o-m but this fall was mitigated by a strong output gain in the electrical and electronics industry, that, with its 5.4 percent monthly increase, was the only bright spot among the key sectors. Looking at the performance in key sectors in comparison to previous year’s output levels, weakening trend in metal industry excluding the electrical and electronics industry stands out.
The underlying trend in Finnish industry has weakened, yet new orders brighten the near term outlook
The overall growth trend in the Finnish manufacturing has painted a picture of a weakening industry output. Nevertheless, the turnaround seen in industrial orders seen after the summer brings hope that the slide may have been at least halted. However, without a proper strengthening of European industrial barometers and German manufacturing orders, it is difficult to forecast a sustainable improvement to Finnish manufacturing. Hence, the outlook remain extremely blurry.



 




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Tiina Helenius

Chief Economist Finland

Finland and Emerging Asia

tihe01@handelsbanken.se

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