Transcript The Federation of Finnish Technology Industries

Technology Industry /
Finnish Economic
Situation and Outlook
March 2014
The Technology Industry Is Comprised
of Five Sub-sectors
Electronics and
Electrotechnical Industry
ABB, Ensto, Murata Electronics, Nokia,
Nokia Siemens Networks, 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,
instruments, electrical machinery
• Turnover (2013): 14.2 billion euros
• Personnel (2013): 46 600
Metals Industry
• Steel products, non-ferrous
metals, castings
• Turnover (2013): 9.4 billion euros
• Personnel (2013): 15 900
Information Technology
Mechanical Engineering
• Machinery, metal products,
vehicles
• Turnover (2013): 26.3 billion euros
• Personnel (2013): 132 600
• IT services, applications
and programming
• Turnover (2013): 8.3 billion euros
• Personnel (2013): 55 200
Consulting Engineering
• Expertise for construction
industry and infrastructure
• Turnover (2013): 5.5 billion euros
• Personnel (2013): 45 700
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The Technology Industry –
the Most Important Sector in Finland
• 55% of total Finnish exports.
• 80% of private-sector
R&D investment.
• Almost 300,000 employed
directly in the sector, 740,000
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
34
32
30
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
Billion euros,at current prices
Metals industry
Mechanical engineering
Electronics and
electrotechnical industry
Information technology
Consulting engineering
2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Statistics Finland, The Federation of Finnish Technology Industries
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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 12 billion euros.
Source: National Board of Customs, Statistics Finland
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Turnover of the Industry and Technology Industry
in Finland
150
Change: 1-11, 2013 / 1-11, 2012, %
2005 = 100
140
130
Teollisuus
-4 %
120
110
Teknologiateollisuus
100
-6 %
90
80
2005
2006
2007
2008
2009
2010
2011
2012
2013
Seasonally adjusted turnover index, latest information 11/2013.
Source: Statistics Finland
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Turnover of the Technology Industry in Finland
200
Change: 1-11,2013 / 1-11,2012, %
2005 = 100
190
Information technology
180
170
+11 %
160
150
Consulting engineering
140
+2 %
130
Mechanical engineering
120
-6 %
110
Metals industry
100
-8 %
90
80
Electronics and electrotechnical
industry
70
60
50
-12 %
2005
2006
2007
2008
2009
2010
2011
2012
2013
Seasonally adjusted turnover index, latest information 10/2013. 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
Million euros, at current prices
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
Combined
Export
Domestic
2005
2006
2007
Change:
Export:
Domestic:
Combined:
2008
2009
2010
2011
IV,2013 / IV,2012
-15 %
-3 %
-12 %
2012
2013
IV,2013 / III,2013
+15 %
+13 %
+15 %
*) Excluding metals industry.
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information October-December 2013
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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
16,000
Export
14,000
12,000
10,000
Domestic
8,000
6,000
4,000
2,000
0
2005
2006
Change:
Export:
Domestic:
Combined:
*) Excluding metals industry.
2007
2008
2009
2010
2011
2012
2013
31.12.2013 / 31.12.2012 31.12.2013 / 30.9.2013
-12 %
-2 %
-7 %
-5 %
-11 %
-2 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 31.12.2013
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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
Change:
Export:
Domestic:
Combined:
2007
2008
2009
2010
2011
IV,2013 / IV,2012
-13 %
-34 %
-15 %
2012
2013
IV,2013 / III,2013
+25 %
-3 %
+23 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information October-December 2013
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Value of Order Books in the Electronics and
Electrotechnical Industry in Finland
8,500
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
31.12.2013 / 31.12.2012
-15 %
-33 %
-16 %
2012
2013
31.12.2013 / 30.9.2013
+18 %
-4 %
+16 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 31.12.2013
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Value of New Orders in the Mechanical Engineering in
Finland
5,000
Million euros, at current prices
4,500
4,000
3,500
Combined
3,000
Export
2,500
2,000
Domestic
1,500
1,000
500
0
2005
2006
Change:
Export:
Domestic:
Combined:
2007
2008
2009
2010
2011
IV,2013 / IV,2012
-19 %
-4 %
-16 %
2012
2013
IV,2013 / III,2013
+2 %
+13 %
+4 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information October-December 2013
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Value of Order Books in the Mechanical
Engineering in Finland
Million euros, at current prices
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
Combined
Export
Domestic
2005
Change:
Export:
Domestic:
Combined:
2006
2007
2008
2009
2010
2011
31.12.2013 / 31.12.2012
-11 %
-17 %
-12 %
2012
2013
31.12.2013 / 30.9.2013
-11 %
-12 %
-11 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 31.12.2013
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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
IV,2013 / IV,2012
+31 %
+17 %
+19 %
2011
2012
2013
IV,2013 / III,2013
+30 %
+26 %
+27 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information October-December 2013
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Value of Order Books in the Consulting
Engineering in Finland
600
Million euros, at current prices
550
Combined
500
450
400
Export
350
300
250
Domestic
200
150
100
50
0
2005
Change:
Export:
Domestic:
Combined:
2006
2007
2008
2009
2010
31.12.2013 / 31.12.2012
+12 %
+25 %
+22 %
2011
2012
2013
31.12.2013 / 30.9.2013
+6 %
+2 %
+3 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 31.12.2013
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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
Change:
Combined:
2007
2008
2009
2010
2011
IV,2013 / IV,2012
+23 %
2012
2013
IV,2013 / III,2013
+21 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information October-December 2013
21.7.2015
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Value of Order Books in the Information
Technology in Finland
Million euros, at current prices
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2007
Change:
Combined:
2008
2009
2010
2011
2012
2013
31.12.2013 / 31.12.2012 31.12.2013 / 30.9.2013
+3 %
+1 %
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest information 31.12.2013
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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: 31.12.2013 / 31.12.2012, %
180 %
160 %
140 %
120 %
100 %
80 %
60 %
40 %
20 %
Median: 0 %
0%
Average: -11 %
-20 %
-40 %
-60 %
-80 %
-100 %
Companies in random order
Source: The Federation of Finnish Technology Industries’ order book survey’s
respondent companies, latest information 31.12.2013
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Personnel in the Technology Industry
340,000
Some 18 000 of
employees affected by
temporary or
part-time lay-offs
31.12.2013
320,000
300,000
280,000
260,000
240,000
220,000
200,000
180,000
160,000
140,000
2008
2009
Personnel in Finland
2010
2011
2012
2013
Personnel in subsidiaries abroad
Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force
survey
21.7.2015
20
Change in the Number on Personnel in the
Technology Industry in Finland Compared with a Year
Earlier
60 %
Change by companies: 31.12.2013 / 31.12.2012
50 %
40 %
30 %
20 %
10 %
Median: -1,3 %
0%
Average: -2,1 %
-10 %
-20 %
-30 %
-40 %
-50 %
-60 %
Companies in random order
Source: The Federation of Finnish Technology Industries’ labour force survey
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Technology Industry Personnel in Finland
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
Metals industry
Mechanical engineering industry
Information technology
Consulting engineering
2009
2010
2011
2012
2013
Electronics and Electrotechnical Industry
Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey
21.7.2015
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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
21.7.2015
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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 64 billion. Turnover in the
pre-crisis year 2008 was EUR 82 billion.
- The monetary value of new orders in October-December 2013 was 12
% lower than in the corresponding period of 2012, but 15 % higher than
at the level of the preceding quarter.
- At the end of December, the value of order books was 11 % lower year
on year, and 2 % lower the value reported at the end of September
- The turnover of technology industry companies in early 2014 is
expected to be roughly equal in comparison with the corresponding
period last year.
- Since 2008, personnel numbers in Finland have shrunk by 31,000
employees, totalling 296,000 in 2013.
- Small and medium-sized enterprises in particular have reported weak
development in profitability.
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Optimism with regard to an
upturn in the growth of the
global economy has
increased
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26
Industrial Production Volume
Industrial production volume in EU countries 10 %,
but in Finland 19 % lower since early 2008
110
2008=100
105
USA
100
95
EU28
countries
90
Japan
85
80
Finland
75
70
65
2008
2009
2010
2011
2012
2013
Seasonally adjusted volume index, latest information 12/2013.
Source: Eurostat, Federal Reserve (USA), Statistics Bereau and Statistics Center
21.7.2015
(Japan)
27
Industrial Production Volume in EU Countries
125
2008=100
120
Poland
115
Estonia
110
Belgium
105
Austria
100
Germany
95
Sweden
90
Finland
85
Italy
80
Spain
75
70
2008
2009
2010
2011
2012
2013
Seasonally adjusted volume index, latest information 11/2013 or 12/2013.
Source: Eurostat
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Industrial Confidence Indicator* in the EU Countries
Has Improved, but still Slightly in Finland
20
15
10
UK
5
0
Germany
-5
-10
-15
Sweden
-20
-25
Finland
-30
-35
-40
France
-45
-50
-55
2008
2009
2010
2011
2012
2013
2014
* The indicator is an average of the responses (balances) to the questions on production expectations, order books and stocks.
If the balance is positive, more respondents expect the economic situation to be improving than to be decreasing.
Source: EU Commission: Business and Consumer Surveys, February 2014
21.7.2015
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Growth Continues in Developing Countries,
but Slower than During Last Years
Manufacturing and services sector purchasing magers’ index
50 = no change on previous month
Latest information February 2014.
Source: Markit, HSBC
GDP, % v/v, y/y
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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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31
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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Almost all Western Countries have Excessive Public
Debt
Public debt / GDP, %
210
200
190
180
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
Greece
Italy
Irland
Portugal
Belgium
Germany
Spain
Finland
Sweden
2005
2006
2007
2008
2009
2010
2011
Source: OECD, Economic Outlook, November 2013
2012
2013e
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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
Working day and seasonally adjusted index.
Latest information October-December 2013.
Source: Statistics Finland / National Accounts
2011
2012
2013
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35
Finnish Exports lagging Behind Competitors
230
Export of goods and services by quarter, billion euros, at current prices, index
220
210
Estonia
200
190
Poland
180
Chech
Republic
Germany
170
160
The
Netherlands
Belgium
150
140
130
Sweden
120
Finland
110
100
2005,I = 100
90
2005
2006
2007
2008
2009
2010
Working day and seasonally adjusted index.
Latest information July-September 2013.
Source: Eurostat
2011
2012
2013
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The Share of Industry in GDP in Finland 1900-2012
35%
30%
25%
20%
15%
10%
5%
0%
Industry
Source: Statistics Finland
Industry + service sectors in the technology industry
21.7.2015
37
Finland not attracting Companies’ Investment
Companies’ Fixed Investments in Different Countries
Indeksi, 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, November 2013
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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
Compared to Germany
Compared to the Netherlands
2008
2009
2010
Compared to Spain
Compared to Austria
2011
2012
2013
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 III/2013.
39
21.7.2015
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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