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GDP contracted in the second quarter of the year

In the second quarter of 2005, the volume of Finland's gross domestic product shrunk by 1.6 per cent from the previous quarter. Compared with the second quarter of 2004, GDP was up by 0.2 per cent. Year-on-year growth was only recorded in service industries. The growth of the economy was weakened by the industrial action in the paper industry.

There were two working days more than one year previously. Adjusted seasonally as well as for working days, the change in GDP from twelve months before was -0.3 per cent.

According to the Flash estimate of GDP compiled by Eurostat, the Statistical Office of the European Communities, in the second quarter of 2005 GDP grew in the EU area by 0.3 per cent from the previous quarter, and was 1.3 per cent up on the corresponding time period of the year before.

Output

In agriculture the volume of output was equal to one year ago, but output in forestry was more than 20 per cent lower as fellings reduced due to the industrial action in the paper industry.

Industrial output was almost seven per cent lower than twelve months earlier. In the wood and paper industry, output fell by nearly 40 per cent in the second quarter of the year because of the industrial action in that quarter that lasted around six weeks. Output in the metal industry increased by over two per cent. In other manufacturing, output grew by one per cent in the second quarter.

In the April to June period, output in construction in-creased by good two per cent from the year before. Building construction grew by two per cent and civil engineering by nearly four per cent compared with one year previously.

The sales volume of trade was over six per cent greater than twelve months earlier. Wholesale trade and retail trade both increased by around six per cent. Motor vehicle sales were nine per cent up compared with twelve months back. Output in the transport industry grew by good one per cent in the second quarter of 2005.

Imports, exports, consumption and investments

The output of the national economy was increased by household consumption and exports. The volume of ex-ports grew by over seven per cent, despite the halt in exports of paper during the industrial action. Exports of machinery and equipment and electronic products grew strongly. In the second quarter of 2005, imports were six per cent up on the year before.

Private consumption grew by 3.5 per cent in the second quarter. Households' purchases of new motor vehicles turned to growth after having contracted for one year before that. Year-on-year, purchases of new cars were up by six per cent. Purchases of furniture and especially domestic appliances were plentiful. Households' consumption of services grew by around two per cent.

Construction investments were increased by good one per cent. Housing construction decreased by nearly one per cent, but other building construction grew by three per cent. Investments in civil engineering grew by approximately four per cent. Investments in machinery and equipment contracted by eight per cent for the second successive quarter. In the second quarter of the year, pri-vate investments decreased by two per cent and public investments were of nearly the same magnitude as twelve months earlier.

Employment, wages and salaries and national income

Employment improved in the second quarter of 2005. The number of employed persons went up by 1.7 per cent from the corresponding quarter of 2004. According to Statistics Finland's Labour Force Survey, the rate of unemployment for the April to June period was 9.6 per cent. In last year's corresponding quarter it stood at 10.4 per cent. The rate of employment was 68.8 per cent in the second quarter of 2005, having been 67.8 per cent twelve months previously.

In the second quarter of 2005, the nominal wages and salaries bill (excluding incentive stock options) of the national economy grew by 4.0 per cent. Operating surplus, which in business bookkeeping roughly corresponds to business profit, and households' entrepreneurial in-come contracted by one per cent. In the second quarter of the year, national income remained in nominal terms on level with the previous year, because more dividends from securities were paid abroad than one year before. In real terms national income declined by six per cent, be-cause the terms of trade weakened.

The available data

The available data

These preliminary data on the second quarter of 2005 are based on information on economic development available by 2 September 2005.

Data at the annual level correspond with the National Accounts data released on 14 July 2005.

Data concerning the third quarter of 2005 will be re-leased on 9 December 2005.

Volume calculation will be revised

In National Accounts the methods for fixed price calculations are being revised. Output at current prices and intermediate consumption will be deflated separately, and value added at fixed prices will be derived as the difference of these figures. At the same time, the fixed base year will be changed into a varying base year. The data will be published at the beginning of 2006.

The corresponding method will be introduced to the calculation of quarterly national accounts at the end of February 2006.

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Last updated 8.9.2005