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Rapid growth of GDP continued also in the second quarter of the year

Calculated at reference year 2000 prices, the seasonally adjusted volume of gross domestic product increased in the second quarter of 2007 by 0.9 per cent from the first quarter. Compared to the second quarter of 2006, GDP was up by 4.4 per cent. Primary and secondary production, as well as services all grew from twelve months back. The growth was strongest, at over 18 per cent, in primary production. Secondary production grew by 6.0 per cent from twelve months back, with the metal industry showing strongest growth. Services increased by 3.4 per cent.

The second quarter of 2007 had the same number of working days as twelve months before.

According to the Flash estimate of GDP compiled by Eurostat, the Statistical Office of the European Communities, in the second quarter of 2007 GDP grew in the EU area by 0.5 per cent from the previous quarter, and was 2.8 per cent up on the corresponding time period of the year before.

GDP growth in the first quarter of 2007 remained at 5.5 per cent higher than one year before, as the effects of the revisions of source data in various industries cancelled each other out.

Output

Calculated at reference year 2000 prices, the volume of value added in agriculture was five per cent higher in the second quarter than one year before. In the forest industry value added went up by as much as 16.5 per cent, which continues to reflect the strongly increased volume of market fellings boosted by risen stump prices observed in the first quarter.

Value added in manufacturing was just short of six per cent up on the second quarter of 2006. In the wood and paper industry value added grew by 2.5 per cent. Value added in the metal industry (incl. electronics industry) was over 10 per cent up from twelve months back. In other manufacturing, too, value added grew by a good 3 per cent in the second quarter.

In the April to June period, the value added generated by construction increased by just under seven per cent from the year before.

The volume of value added generated by trade was 5.4 per cent higher than twelve months earlier.

Transport, storage and communications went down by slightly less than one per cent in the second quarter. Real estate and business activities grew by just short of six per cent year-on-year.

Imports, exports, consumption and investments

Total demand was increased in the second quarter of the year by all demand components: exports, consumption and investments. In the April to June period the volume of exports increased by 6.0 per cent from twelve months back. The volume of imports grew by 1.6 per cent, even though the imports of services decreased clearly.

The volume of private consumption went up by 2.4 per cent in the second quarter. The growth was strongest in consumption on semi-durables, which include i.a. clothing and footwear. Government consumption expenditure increased by 1.3 per cent.

Investments in construction increased by 7.6 per cent, with strongest growth recorded in other building construction. The total volume of investments in machinery, equipment and transport equipment grew by 1.4 per cent. In the second quarter of the year, private investments increased by 6.4 per cent and public investments by a good one per cent from twelve months earlier.

Employment, wages and salaries and national income

Employment improved in the second quarter of 2007. The number of employed persons went up by 2.9 per cent from the corresponding quarter of 2006. The number of hours worked in the national economy increased by 2.3 per cent from twelve months back. The quarter contained the same number of working days as the corresponding quarter of the year before. According to Statistics Finland's Labour Force Survey, the rate of unemployment for the April to June period was 7.8 per cent. In last year's corresponding quarter it stood at 9 per cent.

In the second quarter of 2007, the nominal wages and salaries bill (excluding incentive stock options) of the national economy grew by 5.5 per cent. The operating surplus (net), which in business bookkeeping corresponds roughly to business profit, increased by 4.3 per cent calculated at current prices. National income (net) calculated at current prices was 3.9 per cent greater than in the corresponding quarter of the previous year.

The available data

These preliminary data on the second quarter of 2007 are based on the information on economic development available by 3 September 2007.

Data at the annual level correspond with the National Accounts data released on 12 July 2007.

Data concerning the third quarter of 2007 will be released on 5 December 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 (of volumes) 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, the fixed base year was replaced by a moving base year, which is always the previous year. The data are published as series at reference year 2000 prices, chained from quarterly figures calculated from mean prices of the previous year with the so-called annual overlap method.

The calculation method makes figures on value added for individual industries highly volatile. The quarterly data on value added by individual industry should be approached with great caution. Thus, they 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 partly recalculated with the revised method for the quarters of 2000N1 to 2007N2. The figures for 2006 and 2007 used in calculating the series at reference year prices have been calculated directly at the mean prices of the preceding year according to the annual overlap method. The figures for the years 2000 to 2005 have been averaged by using value data from the previous years. Consequently, the quarterly change percentages, calculated at reference year 2000 prices, in a comparison of the years 2006 and 2005 (e.g. 2006N1/2005N1) may seem odd and should be approached with caution. The annual changes 2006/2005 are, however, entirely comparable.

Years before 2000 have been chained backwards with earlier data. The series have been balanced to the levels of annual accounts.

The time series revision of the quarterly accounts is still ongoing, and the revised figures from the time series according to the new methodology will be released by the end of 2007.

The years 2005 and 2006 are preliminary and will become revised in the next publication of annual accounts on 31 January 2008. A detailed report on the methodological revision of National Accounts can be found on Statistics Finland's website at: http://tilastokeskus.fi/til/vtp/vtp_2006-03-31_men_007_en.html

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Last updated 7.9.2007