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Growth of GDP continued to slow down in the first quarter

In the first quarter of 2008, the volume of Finland's seasonally adjusted gross domestic product increased by 0.7 per cent from the previous quarter. Compared to the first quarter of 2007, GDP was up by 2.8 per cent. The seasonally adjusted change in volume was 3.1 per cent from the year before. Calculated at current prices, GDP grew by 6.0 per cent year-on-year.

The year-on-year growth in the volume of GDP in the last quarter of 2007 was 3.7 per cent, and GDP grew by 4.4 per cent in the year. Economic growth appears to have slowed down from the year before and is at present very close to its long-term average (2.7 per cent).

For the past two years Finland's economic growth had been above the EU average, but it has now slowed down to the average level. According to the flash estimate of GDP compiled by Eurostat, the Statistical Office of the European Communities, in the first quarter of 2008 GDP grew in the EU area by 0.7 per cent from the previous quarter, and was 2.4 per cent up on the corresponding time period of the year before.

Output

In primary production, the volume of value added was 8.2 per cent smaller in the first quarter than one year earlier. The value added of agriculture contracted by 17 per cent. The strong growth observed in forestry throughout 2007 came to an end and value added contracted by nearly 8 per cent.

The volume of value added in secondary production, that is manufacturing and construction, grew by 5.8 per cent in the first quarter. The value added of manufacturing was 6.1 per cent higher than one year previously. In the wood and paper industry value added remained on level with the previous year. No signs of a recession were observed in the metal industry (incl. electronics industry) and value added grew by as much as 14.5 per cent from twelve months back. By contrast, value added in other manufacturing contracted by one-half of a percentage point. The volume of value added in construction grew by 5.8 in the January to March period from the year before.

In service industries, the volume of value added was 2.0 per cent greater than in the first quarter of 2007. The volume of value added in trade grew by 4.2 per cent from twelve months earlier. The highest growth was observed in the sale of motor vehicles, because of the vehicle tax revision. Transport, storage and communications went down by one per cent, mostly because of weak development in communications. Real estate and business activities grew by 3.6 per cent year-on-year. The volume of total value added generated by all industries was 2.9 higher than twelve months earlier.

Imports, exports, consumption and investments

Total demand was pushed up in the first quarter of the year by all demand components: exports, consumption and investments. In the January to March period the volume of exports increased by 4.8 per cent from twelve months back. The exports of goods increased by 4.1 per cent and that of services by 8.5 per cent. The volume of imports fell by 0.6 per cent. The imports of goods grew by one-half of a per cent but the imports of services contracted by 4.5 per cent. Data on imports and exports may become substantially revised. The growth of imports (goods and services together) in the last quarter of 2007 became revised to 3.3 per cent from the 1.4 per cent indicated by the February data. The growth in the volume of exports in the last quarter became revised to 4.3 per cent from February's 3.0 per cent.

The volume of private consumption went up by 3.9 per cent in the first quarter. The growth was strongest in the consumption on durables, which show the peak in motor vehicle sales caused by the vehicle tax revision. The volume of government consumption expenditure increased by 0.3 per cent.

The volume of investments grew by 7.7 per cent year-on-year in the first quarter; the growth in investments thus continued as fast as in 2007 (7.6 per cent). Investments in construction increased by 8.5 per cent, with strongest growth recorded in construction of office premises. The volume of investments in machinery, equipment and transport equipment grew by 12.7 per cent. In the first quarter of the year, private investments increased by 8.9 per cent, but public investments contracted by one-half of a per cent.

Employment, wages and salaries and national income

Employment improved in the first quarter of 2008. The number of employed persons went up by 2.0 per cent from the corresponding quarter of 2007. By contrast, the number of hours worked in the national economy fell by one per cent. The quarter had two less working days than in the year before, which explains the small number of hours worked. According to Statistics Finland's Labour Force Survey, the rate of unemployment in the January to March period was 6.6 per cent. In the corresponding period last year it stood at 7.6 per cent.

In the first quarter of 2008, the nominal wages and salaries bill (excluding incentive stock options) of the national economy grew by 8.5 per cent. The operating surplus (net), which in business bookkeeping corresponds roughly with business profit, increased by 4.5 per cent calculated at current prices. National income (net) calculated at current prices was 6.2 per cent greater than in the corresponding quarter of the previous year.

The available data

These preliminary data on the first quarter of 2008 are based on the information on economic development available by 30 May 2008. The quality description is available on Statistics Finland's Internet pages at http://tilastokeskus.fi/til/ntp/ntp_2008-01-03_laa_001.html (In Finnish only.)

The annual data in the publication correspond with the national accounts data published on 29 February 2007, apart from imports, exports and other external transactions, which have been updated to correspond with the most recent current accounts data.

Data concerning the second quarter of 2008 will be released on 8 September 2008, when the data for previous quarters will also be revised. Quarterly data continue to be revised until final annual accounts data are published at a lag of around two years.

The data on 2006 and 2007 are preliminary. The data on 2007 become revised in connection with the next annual accounts release on 10 July 2008. Detailed information on the revision of National Accounts can be found on Statistics Finland's website at: http://tilastokeskus.fi/ajk/tiedotteet/v2006/tiedote_022_2006-03-31_en.html

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Last updated 9.6.2008