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Rapid growth of GDP continued in the third quarter of the year

In the third quarter of 2006, the volume of gross domestic product at constant prices increased by 0.9 per cent from the previous quarter. Compared to the third quarter of 2005, GDP was up by 5.4 per cent. Secondary production and services grew from twelve months back. The growth was boosted especially by a strong increase in manufacturing production. Very strong growth from the previous year was recorded in the production of both the pulp and paper industry and the metal industry.

There was one working day less than one year previously. Adjusted seasonally as well as for working days, the change in GDP from twelve months earlier was 5.8 per cent.

According to the Flash estimate of GDP compiled by Eurostat, the Statistical Office of the European Communities, in the third quarter of 2006 GDP grew in the EU area by 0.6 per cent from the previous quarter, and was 2.7 per cent up on the corresponding time period of the year before.

Output

Calculated at the prices of the reference year 2000, the volume of value added in agriculture was over five per cent higher than one year ago. By contrast, output in forestry went down and was nearly three per cent lower than one year earlier due to reduced market fellings.

The value added of industry was good 12 per cent higher than twelve months earlier. In the wood and paper industry, output went up by over 14 per cent in the third quarter of the year. Output in the metal industry increased by close on 16 per cent from one year ago. In other manufacturing, output also grew, by just short of six per cent, in the third quarter.

In the July to September period, the value added of construction increased by just under four per cent from the year before.

The volume of output in trade was over seven per cent higher than twelve months earlier. In the transport industry, value added grew by under 1.5 per cent in the third quarter of 2006.

 

Imports, exports, consumption and investments

The output of the national economy was increased in the third quarter of the year by all demand components: exports, household consumption and investments. The volume of exports grew by over eight per cent from July to September. Imports were just under six per cent up on the year before.

Private consumption grew by more than three per cent in the third quarter. Purchases of clothing, footwear, furniture and especially household appliances and electronics continued plentiful. Consumption of services grew by barely one per cent in the third quarter.

Construction investments increased just under three per cent. Housing construction grew by five per cent but other building construction by only barely one per cent. Investments in civil engineering went up by good 0.5 per cent. Investments in machinery and equipment increased by nearly 10 per cent, having grown by good four per cent in the quarter before. In the third quarter of the year, private investments went up by more than five per cent and public investments by just short of two per cent from twelve months earlier.

Employment, wages and salaries and national income

Employment improved in the third quarter of 2006. The number of employed persons went up by 1.8 per cent from the corresponding quarter of 2005. The number of hours worked in the national economy grew in the third quarter by good one per cent from the corresponding quarter of 2005. In 2006, the third quarter had one less working days than in 2005. According to Statistics Finland's Labour Force Survey, the rate of unemployment for the July to September period was 6.8 per cent. In last year's corresponding quarter it stood at 7.2 per cent. The rate of employment was 76.4 per cent in the third quarter of 2006, having been 75.6 per cent in the respective quarter of 2005.

In the third quarter of 2006, the nominal wages and salaries bill (excluding incentive stock options) of the national economy grew by 3.6 per cent. Operating surplus, which in business bookkeeping roughly corresponds to business profit, increased by good 13 per cent. In the third quarter of the year, national income was just under seven per cent greater than in the corresponding quarter of the previous year.

The available data

These preliminary data on the third quarter of 2006 are based on the information on economic development available by 1 December 2006.

Data at the annual level correspond with the National Accounts data released on 13 July 2006.

Data concerning the last quarter of 2006 will be released on 1 March 2007, when the data for previous quarters will also be revised.

Revised method of calculating value added per quarter

The calculation method of value added has been revised in quarterly national accounts. Value added by industry is now calculated by deducting intermediate consumption from output. In calculations at constant prices output and intermediate consumption are now deflated separately and value added at constant prices is derived as the difference of these figures. At the same time, fixed base year was replaced with a changing base year, so that the previous year is always the base year but published data are expressed at the prices of the reference year 2000 as chained series (calculated using the average prices of the previous year).

The calculation method makes the value added figures for individual industries highly volatile, and data on the value added generated by an individual industry in a given quarter should be approached with great caution. Thus, the data by industry should be regarded as an interim stage in the calculation, in which the eventual aim is to produce as reliable as possible summed up value added for all industries in the whole economy.

The data contents of quarterly accounts have been recalculated with the revised method for the quarters of 2000N1 to 2006N3. Quarters older than this have been chained backwards using the previous data and balanced to the new annual levels. The data for 2000-2005 have also been balanced to the new levels of annual accounts.

The data on 2004 and 2005 are preliminary. Further information about this national accounts reform is available on Statistics Finland's website at: http://www.stat.fi/til/vtp/vtp_2006-03-31_men_007_en.html and information concerning the accuracy of the new quarterly compilation method for GDP is available on the website at: http://www.stat.fi/til//ntp_2006_01_2006-06-09_men_001_en.html

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Last updated 8.12.2006