The share of exports in Finland’s gross domestic product has remained unchanged for years, while the share of exports in competitor countries such as Denmark and Sweden has increased.
Nordea’s chief economist Wind Birch quotes his Swedish colleagues.
“In Stockholm, they think that Sweden has become a headquarters economy. These famous head offices, which operate, for example, in the retail sector and in digital services, produce quite a lot of added value for Sweden,” says Koivu at Markkinaaraad.
According to Koivu, the head offices feed a wide service network.
“There is a need for high-level legal services, financial services, consulting planning services, and thus the export cluster will be built around industries with a slightly higher value added in Sweden compared to Finland. There, the role of the service sector is already almost comparable to the role of goods exports.”
Aktia’s chief economist Lasse Corin reminds that there are more investments.
“There is a huge amount of investment in Sweden than in Finland. And now we are not talking about construction investments, but product development investments, machine and equipment investments. Relative to the size of the economy, they are made in Sweden significantly more than in Finland.”
Finland also has a different export structure than Sweden. Finland exports fuel and pulp to the world, while Sweden exports cars and medicine.
Nordea’s Koivu reminds us that Finland’s well-known export weakness is unilateralism.
“The structure of Finnish exports is too one-sided. The gaping hole in particular is on the consumer goods side.”
Koivu says that Sweden is able to balance business cycles through the consumer and service side.
“Consumer demand radiates through service exports quite strongly to the Swedish economy. There are brands that are driven in the consumer market. We don’t have a consumer brand of similar size. The challenge is that our export sector is doing just fine when investments and construction are doing well in the world. But it is cyclical. The consumer side would be an export industry that balances business cycles.”
Aktian’s Corin reminds that the export of goods is always dependent on some imported components and raw materials. In service exports, there is less dependence and purely know-how is sold, which is more economically profitable.
“The service export euro is better than the goods export euro, because it leaves more money in Finland and in your own pocket.”
What are the prospects for the export sector next year? Is there a turn for the better? Watch the entire conversation in the attached video.
Market narrate
The Market Council will discuss Finland’s export prospects this week and how exports could be increased. What has happened to exports in recent years and why does Finland seem to have fallen from the level of competing countries? What about Finnish exports to the United States, when import duties are being planned in the country?
The Chief Economist of the Technology Industry is a guest speaker Petteri RautaporrasNordea’s Chief Economist Wind Birch and Aktia’s chief economist Lasse Corin.
Market Council is hosted by Kauppalehti’s editor-in-chief Soili Semkina.
The commercial partner of the Markkinaraati program is Aktia. All journalistic decisions are made in the editorial office.
Watch all Markkinaraati episodes from here.
Source: www.arvopaperi.fi
