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Fast Comment FinlandFinnish manufacturing continued to perform well in July

  1. Manufacturing grew by 3.8 percent y-o-y in July
  2. A sharp increase in new manufacturing orders
  3. We expect a slightly positive contribution from net exports
Manufacturing grew by 3.8 percent y-o-y in July
The Finnish manufacturing continues to resist the global manufacturing slowdown. The preliminary statistics showed that robust growth continued also in July, as industrial output increased by 3.8 percent y-o-y/0.5 percent m-o-m. During January to July, industrial output went up by 2.1 percent y-o-y. Production increased most in mining and quarrying, by 12.6 percent m-o-m, while production decreased most in electricity, gas, steam and air conditioning supply, by 3.7 percent.
A sharp increase in new manufacturing orders
New manufacturing orders delivered more positive news regarding Finnish industry, as new orders went up by 18.1 percent y-o-y in July. This sharp increase originated from strong orders growth for the metal industry and the manufacture of paper and paper board products, which increased by 24.3 and 18.1 percent respectively. Bear in mind, however, that the statistics show strong fluctuations by month. Still, new manufacturing orders increased by 3.4 percent in January to July from the year before. The preliminary statistics for foreign trade of goods was published already last Friday. The value of Finnish goods exports decreased by 0.6 percent y-o-y in July, whereas the value of goods imports went up by 1.5 percent. During January-July 2019, the value of goods exports increased by 3.2 percent and the value of goods import decreased by 0.2 percent.
We expect slightly positive contribution from net exports
The Finnish industry statistics still remain relatively upbeat compared to developments in global manufacturing, where the global PMIs indicate a contraction in the sector. However, the foreign trade statistics imply that the Finnish economy will not be immune to global issues, as goods exports to the EU already show some adverse effects taking place. That much is obvious, as the manufacturing sectors in Finland's largest trading partners (Germany in particular) are more or less struggling at the moment. Nevertheless, we expect Finnish goods export growth to remain moderate this year, as there is still one cruise ship delivery taking place in October. As import growth is weakening, we expect net exports to contribute slightly positively to Finnish GDP growth this year.

 



Disclaimer

Janne Ronkanen

Senior Economist

Finland

jaro06@handelsbanken.se

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