Transcript The Federation of Finnish Technology Industries

Technology Industry /
Finnish Economic
Situation and Outlook
August 2014
The Technology Industry Is Comprised
of Five Sub-sectors
Electronics and
Electrotechnical Industry
ABB, Ensto, Microsoft Mobile, Murata
Electronics, Nokia, 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…
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2
The Technology Industry
in Finland
Electronics and
Electrotechnical Industry
• Data communications equipment,
electrical machinery, medical
technology products
• Turnover (2013): 15.8 billion euros
• Personnel (2013): 43 200
Metals Industry
• Steel products, non-ferrous
metals, castings
• Turnover (2013): 8.8 billion euros
• Personnel (2013): 15 800
Mechanical Engineering
Information Technology
• Machinery, metal products,
vehicles
• Turnover (2013): 27.2 billion euros
• Personnel (2013): 125 500
• IT services, applications
and programming
• Turnover (2013): 8.3 billion euros
• Personnel (2013): 54 500
Consulting Engineering
• Expertise for construction
industry and infrastructure
• Turnover (2013): 5.0 billion euros
• Personnel (2013): 46 300
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The Technology Industry –
the Most Important Sector in Finland
• 50 % of total Finnish exports.
• 75 % of private-sector
R&D investment.
• Some 280,000 employed
directly in the sector, 700,000
employed in total, equalling
about 30% of the entire Finnish
labour force.
• The Federation of Finnish
Technology Industries has over
1,600 member companies.
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Turnover of the Technology Industry in Finland
36
34
32
30
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
Billion euros, at current prices
Mechanical engineering
Electronics and
electrotechnical industry
Metals industry
Information technology
Consulting engineering
2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Statistics Finland
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5
Export of Technology Industry Goods from Finland
by Area in 2013
Total goods exports 24.8 billion euros*
Western Europe
11.4 billion €
46.1 %
North America
2.2 billion €
8.8 %
South and Middle America
1.0 billion €
4.1 %
Africa
0.5 billion €
2.1 %
Central and Eastern Europe
4.9 billion €
19.6 %
Middle and
Central East
0.7 billion €
2.8 %
Asia
4.1 billion €
16.5 %
*) In addition to goods exports the sector exports services worth about 11 billion euros.
Source: National Board of Customs, Statistics Finland
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6
Turnover of the Technology Industry in Finland
150
2005 = 100
Change: 1-4,2014 / 1-4,2013, %
140
130
120
110
-1 %
100
90
80
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Seasonally adjusted turnover index, latest information 4/2014.
Source: Statistics Finland
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Turnover of the Technology Industry in Finland
210
Change: 1-4,2014 / 1-4,2013, %
2005 = 100
200
190
Information technology
180
+13 %
170
160
Consulting engineering
150
0%
140
130
Mechanical engineering
120
-1 %
110
Metals industry
100
-7 %
90
80
Electronics and electrotechnical
industry
70
60
50
-6 %
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Seasonally adjusted turnover index, latest information 4/2014. 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
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Value of New Orders in the Technology Industry* in
Finland
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Million euros, at current prices
Combined
Export
Domestic
2005
2006
Change:
Export:
Domestic:
Combined:
2007
2008
2009
2010
2011
2012
II,2014 / II,2013
-1 %
+3 %
0%
2013
2014
II,2014 / I,2014
+1 %
-9 %
-1 %
*) Excluding metals industry and game industry companies.
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information April-June 2014
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Value of Order Books in the Technology Industry* in
Finland
24,000
Million euros, at current prices
22,000
20,000
18,000
Combined
Export
16,000
14,000
12,000
10,000
8,000
Domestic
6,000
4,000
2,000
0
2005
2006
Change:
Export:
Domestic:
Combined:
2007
2008
2009
2010
2011
30.6.2014 / 30.6.2013
-10 %
+2 %
-7 %
2012
2013
2014
30.6.2014 / 31.3.2014
-4 %
0%
-3 %
*) Excluding metals industry and game industry companies.
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 30.6.2014
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Tender Requests* Received by Technology Industry
Companies in Finland
40
30
Balance figure
20
10
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
-10
-20
-30
-40
-50
-60
“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,
latest information: July 2014.
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Value of New Orders in the Electronics and
Electrotechnical Industry in Finland
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Million euros, at current prices
Combined
Export
Domestic
2005
2006
2007
Muutos / Change:
Vientiin / Export:
Kotimaahan / Domestic:
Yhteensä / Combined:
2008
2009
2010
2011
II,2014 / II,2013
-23 %
+7 %
-19 %
2012
2013
2014
II,2014 / I,2014
-10 %
+3 %
-8 %
Lähde/Source: Teknologiateollisuus ry:n tilauskantatiedustelun vastaajayritykset, viimeisin tieto huhti-kesäkuu 2014 /
The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information April-June 2014
12
18.7.2015
Value of Order Books in the Electronics and
Electrotechnical Industry in Finland
8,000
7,500
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Million euros, at current prices
Combined
Export
Domestic
2005
2006
Change:
Export:
Domestic:
Combined:
2007
2008
2009
2010
2011
30.6.2014 / 30.6.2013
-23 %
+8 %
-20 %
2012
2013
2014
30.6.2014 / 31.3.2014
-9 %
+8 %
-7 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 30.6.2014
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Value of New Orders in the Mechanical Engineering in
Finland
Million euros, at current prices
4,500
4,000
3,500
Combined
3,000
2,500
Export
2,000
1,500
Domestic
1,000
500
0
2005
2006
Change:
Export:
Domestic:
Combined:
2007
2008
2009
2010
2011
II,2014 / II,2013
+29 %
+16 %
+26 %
2012
2013
2014
II,2014 / I,2014
+14 %
-3 %
+10 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information April-June 2014
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Value of Order Books in the Mechanical
Engineering in Finland
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Million euros, at current prices
Export
Combined
Domestic
2005
Change:
Export:
Domestic:
Combined:
2006
2007
2008
2009
2010
2011
30.6.2014 / 30.6.2013
-3 %
-1 %
-3 %
2012
2013
2014
30.6.2014 / 31.3.2014
-2 %
-3 %
-2 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 30.6.2014
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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
2011
II,2014 / II,2013
-12 %
+20 %
+16 %
2012
2013
2014
II,2014 / I,2014
-10 %
-4 %
-5 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information April-June 2014
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Value of Order Books in the Consulting
Engineering in Finland
550
Million euros, at current prices
500
Combined
450
400
Export
350
300
250
200
Domestic
150
100
50
0
2005
Change:
Export:
Domestic:
Combined:
2006
2007
2008
2009
2010
2011
30.6.2014 / 30.6.2013
-3 %
+14 %
+11 %
2012
2013
2014
30.6.2014 / 31.3.2014
+5 %
+6 %
+6 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 30.6.2014
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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
2007
2008
2009
Change:
Combined:
2010
2011
2012
II,2014 / II,2013
-15 %
2013
2014
II,2014 / I,2014
-25 %
*) Excl. game industry companies.
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information April-June 2014
18.7.2015
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Value of Order Books in the Information
Technology in Finland
Million euros, at current prices
1,600
1,500
1,400
1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0
2007
Change:
Combined:
2008
2009
2010
2011
30.6.2014 / 30.6.2013
0%
2012
2013
2014
30.6.2014 / 31.3.2014
-1 %
*) Excl. game industry companies.
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 30.6.2014
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Change in Value of Order Books in the Technology
Industry in Finland Compared with a Year Earlier
200 %
Change by companies: 30.6.2014 / 30.6.2013, %
180 %
160 %
140 %
120 %
100 %
80 %
60 %
40 %
20 %
Median: 0 %
0%
Average: -7 %
-20 %
-40 %
-60 %
-80 %
-100 %
Companies in random order
Source: The Federation of Finnish Technology Industries’ order book survey’s
respondent companies, latest information 30.6.2014
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Personnel in the Technology Industry
Some 13 000 of employees
affected by temporary or
part-time lay-offs 30.6.2014
340,000
320,000
300,000
280,000
260,000
240,000
220,000
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2005
2006
2007
2008
Personnel in Finland
2009
2010
2011
2012
2013
2014
(30.6)
Personnel in subsidiaries abroad
Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force
18.7.2015
survey
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 2014
(30.6)
Electronics and electrotechnical industry
Mechanical engineering
Metals industry
Consulting engineering
Information technology
Source: Statistics Finland, The Federation of Finnish Technology Industries’
labour force survey
18.7.2015
22
Technology Industry Personnel in Subsidiaries Abroad
180,000
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
Electronics and electrotechnical industry
Mechanical engineering
Metals industry
Consulting engineering
Information technology
Source: The Federation of Finnish Technology Industries’
labour force survey
18.7.2015
23
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 2024 2026 2028 2030
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
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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 2024 2026 2028 2030
Mechanical engineering
Metals industry
Electronics and electrotechnical industry
Source: Wage inquiry of the Federation of Finnish Technology Industries,
Finnish Centre for Pensions, Statistics Finland
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Situational overview and outlook
•
•
•
•
•
•
- Finland is in the grip of structural change. Development remains
uneven between companies.
- Turnover in Finland in 2013 was some EUR 65 billion. Between
January and April of this year, turnover was slightly lower than twelve
months earlier. Turnover in the pre-crisis year 2008 was EUR 86 billion.
- The monetary value of new orders in April-June 2014 was remained
unchanged from the corresponding period in 2013, but slightly lower
than in the precending quarter.
- At the end of June, the value of order books was 7 % lower year-onyear, and 3 % below the value reported at the end of March.
- The turnover of technology industry companies in the autumn of 2014
is expected to be roughly equal in comparison with the corresponding
period last year.
- Since 2008, personnel numbers in Finland have shrunk by 48,000
employees, totalling 278,000 at the end of June 2014.
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Situation in Russia and
Ukraine hindering
Europe’s revival
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Industrial Production Volume
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Industrial Production Volume in EU Countries
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Euro Countries Are Developing Unevenly
Manufacturing and Services Sector Purchasing Managers’ Index
Purchasing Magers’ Index
50 = ei muutosta edelliskuukaudesta / 50 = no change on previous month
Latest information July 2014.
Source: Markit
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30
World Economic Growth in 2014e
10
GDP growth in 2014, %
9
8
India
Rest of
Asia
Average growth: +3,4 %
5
4
3
Western Europe
Russia
North America
2
Japan
1
Middle East, Africa
6
Rest of Latin America
7
Brazil
Mexico
Rest of Eastern Europe
China
0
-1
0
10
20
30
40
50
60
70
80
90
100
The width of the bar indicates the share (purchasing power parity adjusted) of world GDP in 2013, %
Source: IMF (July 2014)
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World Economic Growth in 2014e with the
Export Shares
10
GDP growth in 2014, %
9
8
6
India
Rest of
Asia
5
Average growth: +2,3 %
4
3
North America
Japan
Western Europe
Russia
2
Middle East, Africa
7
MexicoBrazil
Rest of Latin America
Rest of Eastern Europe
China
1
0
-1
0
10
20
30
40
50
60
70
80
90
100
The width of the bar indicates the export share of technology industry from Finland in 2013, %
Source: IMF (July 2014), Board of Customs
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32
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
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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
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The Big Challenge for
Finland after 2008
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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
2011
Working day and seasonally adjusted index.
Latest information January-March 2014.
Source: Statistics Finland / National Accounts
2012
2013
2014
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36
Finnish Exports lagging Behind Competitors
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37
The Share of Industry in GDP in Finland 1900-2013
35%
30%
25%
20%
15%
10%
5%
0%
Industry
Source: Statistics Finland
Industry + service sectors in the technology industry
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38
Finland’s Industrial Production and Exports Will not
Regain the Level of 2008 with the Present Production
Capacity
Finland’s production capasity has decreased by 20 %
125
Industrial production
ability (production
with capacity in full
use)
120
115
110
Finland's goods and
services exports
(2008=100)
105
100
-21%
95
90
-18%
-16%
85
80
-22%
75
Industrial personnel
(2008=100)
Industrial production
(2008=100)
70
2008
2009
2010
2011
2012
2013
2014
Working hours and seasonally adjusted time series.
Source: Statistics Finland / National Accounts, Industrial volume index
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39
Growth of Public Debt and Tax Rate Out of Control
Increased cost burden requires cuts to public sector
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40
Industrial Investments Alarmingly Low
Industrial fixed and R&D Investments in Finland
Million euros, at current prices
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2005
2006
2007
Industry
2008
2009
2010
2011
2012
2013
2014e
Technology industry
Source: Statistics Finland, Confederation of Finnish Industries’
Investment Survey (June 2014)
18.7.2015
41
Finland not Attracting Companies’ Investment
Companies’ Fixed Investments in Different Countries
Index, 2005=100
140
Germany
135
130
Netherlands
125
120
Sweden
115
USA
110
105
Switzerland
100
95
Finland
90
2005
2006
2007
2008
2009
2010
2011
2012
2013e 2014e 2015e
Source: OECD, Economic Outlook, May 2014
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42
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
2008
Compared to Germany
Compared to the Netherlands
2009
2010
Compared to Spain
Compared to Austria
2011
2012
2013
2014
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 I/2014.
43
18.7.2015
Source: European Central Bank
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
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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
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