Home > Statistics > Quarterly national accounts > 2008 > 2nd quarter > Growth of GDP evened out during the first half of the year, investments decreased in the second quarter

Growth of GDP evened out during the first half of the year, investments decreased in the second quarter

In the April to June period of 2008, the volume of Finland's gross domestic product increased by 0.8 per cent from the previous quarter. Compared to the second quarter of 2007, GDP was up by 2.8 per cent. The seasonally adjusted change in volume was 2.4 per cent from the year before. Calculated at current prices, GDP grew by 6.5 per cent year-on-year.

Revisions put the growth in the volume of GDP in the first quarter of 2008 at 2.3 per cent from the year before and at 0.3 per cent from the previous quarter. The downwards revision was mainly due to major changes in the source data on the metal industry and taxes on products. In 2007, GDP grew by 4.5 per cent. 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).

According to the flash estimate by Eurostat, in the second quarter of 2008 GDP contracted in the EU area by 0.1 per cent from the previous quarter but was 1.7 per cent higher than one year before.

Output

In primary production, the volume of value added was 12.1 per cent smaller in the second quarter than one year earlier. The value added of agriculture contracted by 22 per cent. In forestry the decrease which started already in the first quarter continued and value added contracted by 11 per cent.

The volume of value added in secondary production, that is manufacturing and construction, grew by 4.4 per cent in the second quarter. The value added of manufacturing was 4.3 per cent higher than one year previously. In the wood and paper industry value added decreased by 3 per cent. In the metal industry (incl. electronics industry) value added increased by 7.2 per cent from twelve months back. The first quarter growth of volume in the metal industry was revised exceptionally much downwards due to a correction to source data. The growth figure was now 8.1 per cent instead of the 14.5 per cent estimated in June. In other manufacturing value added increased by 4.2 per cent in the second quarter. The volume of value added in construction grew by 4.6 per cent in the April to June period from the year before.

In service industries, the volume of value added was 2.6 per cent greater than in the second quarter of 2007. The volume of value added in trade grew by 6.2 per cent from twelve months earlier. Similarly to the first quarter, growth was highest in the sale of motor vehicles, which resulted from the entry into force of the vehicle tax revision at the beginning of the year. Transport, storage and communications grew by just 0.6 per cent, mostly because of weak development in communications. Real estate and business activities grew by 4.5 per cent year-on-year.

The volume of total value added generated by all industries was 2.7 higher than twelve months earlier.

Imports, exports, consumption and investments

Total demand was pushed up in the second quarter by exports and consumption, whereas investments decreased slightly.

In the April to June period the volume of exports increased by 6.5 per cent from twelve months back. The exports of goods increased by 3.3 per cent and that of services by as much as 21.9 per cent. The volume of imports went up by 1.9 per cent. The imports of goods grew by 2.4 per cent but the imports of services contracted by 0.2 per cent. Data on imports and exports may become substantially revised. The growth of imports (goods and services together) became revised to +2.1 per cent from the -0.6 per cent indicated by the June data. The growth in the volume of exports in the first quarter became revised in to 6.6 per cent from the June figure of 4.8 per cent.

The volume of private consumption went up by 4.0 per cent in the second quarter. Similarly to 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 public consumption expenditure increased by 1.6 per cent.

After a prolonged period of growth the volume of investments fell by 3.3 per cent in the second quarter from one year ago. The previous fall in the volume of investments occurred in the first quarter of 2005. Investments in construction increased by 5.9 per cent. The growth was strongest in the construction of office premises, whereas investments in residential buildings have decreased in the first half of the year. The volume of investments in machinery, equipment and transport equipment fell by 18.8 per cent because of a major investment during the second quarter of 2007. Private investment decreased by 3.5 per cent in the second quarter. Public investments showed similar developments with a 1.4 per cent decrease.

Employment, wages and salaries and national income

Employment improved in the second quarter of 2008. The number of employed persons went up by 1.6 per cent from one year previously. The number of hours worked in the national economy increased by 3.7 per cent. The quarter had three more working days than the year before, which explains the great increase in the number of hours worked. According to Statistics Finland's Labour Force Survey, the unemployment rate for the April to June period was 7.4 per cent. In the corresponding period last year it stood at 7.8 per cent.

The nominal wages and salaries bill (excluding incentive stock options) of the national economy grew by 8.5 per cent in the April to June period. The operating surplus (net), which in business bookkeeping corresponds roughly with business profit, increased by 4.7 per cent calculated at current prices. National income (net) calculated at current prices was 6.2 per cent greater than in the previous year.

The available data

These preliminary data on the second quarter of 2008 are based on the information on economic development available by 29 August 2008. The quality description is available on Statistics Finland's Internet pages at http://www.tilastokeskus.fi/til/ntp/laa.html (In Finnish only.)

The annual data in the publication correspond with the National Accounts data published on 10 July 2008.

Data on the third quarter of 2008 will be released on 8 December 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 the lag of around two years.

The data on 2006 and 2007 are preliminary. Their data become revised in connection with the next annual accounts release in January 2009. Detailed information on the methodological 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 8.9.2008