Prospects for industry, construction and business services in autumn 2016
Construction began to recover as early as the second quarter of 2015. Since then, the pace of growth has only accelerated. Goods exports contracted in 2015 but turned to slight growth in the second quarter of 2016. In the third quarter of 2016, however, their volume has again remained at the previous year’s level. Despite this, industrial output turned upward in the second quarter of 2016 without subsequently dipping again. Domestic construction and, on the other hand, the large orders received by the transport equipment industry and the machinery and equipment industry — which will only materialise as export deliveries in a few years’ time — are apparently the reason for the turnaround in industrial output. The production volume of the transport sector has been declining all the way up to the third quarter of 2016, such that neither the recovery in construction nor in industry has turned it upward. Output in information services has fallen almost across the board during 2016. The growth of programming services, which grew strongly in recent years, has also stalled, apparently as a result of the sharp drop in output of Microsoft, which belonged to this sector. Among the services covered by the sector forecast, the fastest-growing has been sector class M, that is, professional, scientific, and technical activities. The substantial growth in technical services, for example, is largely explained by the acceleration of domestic construction. Behind the growth trend in programming services and technical services lies a structural shift that has been visible for some time: production is becoming more service-intensive in both domestically and externally oriented industries.
The prospects for industry, construction, and the service industries supporting them for 2017–2018 are relatively positive. The collapse of Nokia’s mobile phone operations and of exports to Russia are over, and new capacity is being built in the forest industry. The shipbuilding industry’s substantial order book and the increasing output of the Uusikaupunki car factory are also factors explaining the recovery in industry. The competitiveness agreement, by reducing labour costs, is also in part strengthening the conditions for export and industrial growth. After a long time, the transport sector is also beginning to grow. The structural development of the economy continues to favour business-supporting service sectors. It is to be expected that, in the coming couple of years as well, programming services and technical services will grow more rapidly than industry on average. (AI translation)
