Home > Statistics > Quarterly sector accounts > 2018 > 1st quarter > Sector-specific review on the data for the first quarter of 2018

Sector-specific review on the data for the first quarter of 2018

Households

The disposable income of households grew in the first quarter of 2018 by five per cent (around EUR 1.3 billion) compared to the corresponding quarter in 2017. The key components of disposable income on the income side are wages and salaries received, entrepreneurial income and property income, and social benefits received. The biggest individual expense items are taxes paid and social contributions.

Compared to the figures one year ago, disposable income grew mainly due to a growth of EUR 0.9 billion in received compensation of employees and an estimated increase of good EUR 0.2 billion in entrepreneurial income, while property income was roughly at the same level as one year ago. There were no major changes in expenditure one way or another, but both income taxes paid and social security contributions, as well as property expenditure were nearly on level with the corresponding quarter of the previous year. Consumption expenditure grew by nearly EUR 900 million compared with the figures last year.

When received social benefits in kind are added to the disposable income of households, the household adjusted disposable income is derived, which is the indicator recommended by the OECD for measuring economic well-being. Social benefits in kind refer to education, health and social services produced by general government and non-profit institutions serving households. In the first quarter of 2018, adjusted disposable income grew at current prices by 4.3 per cent and adjusted for price changes by 3.5 per cent from the corresponding quarter of the year before. The volume indicator describing the development of adjusted disposable income adjusted for price changes can be found in Appendix table 3 of this publication.

Households' seasonally adjusted saving rate was 0.5 per cent in the first quarter of 2018. In the previous quarter, the saving rate stood at -1.3 per cent. The saving rate is derived by deducting consumption expenditure from disposable income. The saving rate is negative if households' consumption expenditure is higher than their disposable income. Households' seasonally adjusted investment rate was 13 per cent of disposable income in the first quarter of 2018, which was slightly higher than the corresponding data of the previous quarter. Most of households' investments were investments in dwellings.

Compensation of employees paid by non-profit institutions serving households decreased by nearly four per cent compared with the quarter of one year ago.

In these statistics, the households sector covers only the actual households sector S14. Sector S15, non-profit institutions serving households, is calculated and published separately. In Eurostat’s publication, the households sector also includes the data for sector S15. Another difference to Eurostat's publication is in how consumption of fixed capital is taken into account. Eurostat publishes investment and saving rates as gross figures. Net data are used in these statistics, that is, when consumption of fixed capital is taken into account the saving rate contracts and the investment rate increases.

Profits and investments in the non-financial corporations sector grew from the previous quarter

In the first quarter of 2018, the seasonally adjusted profit share of non-financial corporations grew to 30.0 per cent from the previous quarter's 29.7 per cent. The profit share refers to the share of the operating surplus in value added. The profit share grew because value added in the non-financial corporations sector grew more than paid compensation of employees. The level of compensation of employees was to some extent affected by the cut in employers’ social insurance contributions that entered into force at the beginning of the year. The investment rate of non-financial corporations, or the proportion of fixed capital investments in value added, grew to a 0.8 percentage point higher level than in the previous quarter to 28.6 per cent.

Profits of financial and insurance corporations grew from one year back

The sector's value added grew in the first quarter of the year by nearly one per cent from the corresponding quarter of the previous year as output went up by around two per cent and intermediate consumption grew by close on three per cent. Due to international group changes in the sector, the operating surplus describing profits in the sector grew significantly and was EUR 834 million. Compensation of employees decreased by four per cent from the level of the corresponding quarter. Value added and operating surplus describe the income that is generated from providing financial services to the public. They do not include property income or holding gains of securities.

Financial position of general government improved clearly year-on-year

In January to March 2018, consolidated total general government revenue grew by EUR 900 million from the respective quarter of the previous year. Consolidated expenditure increased by EUR 500 million. The difference between revenue and expenditure, that is, the deficit (net borrowing) of general government improved by EUR 400 million. Of the sub-sectors, the financial position of central government improved clearly, while the financial position of local government weakened slightly. The financial position of social security funds improved slightly. General government is comprised of central government, local government and social security funds. Consolidated total revenue and expenditure are figures in which flows between the general government sub-sectors have been eliminated. More detailed statistics, where the sub-sectors are specified, are published in the quarterly sector accounts of general government. General government revenue and expenditure by qarter

Current account clearly in surplus in the first quarter of 2018

Exports of goods at current prices from Finland to abroad amounted to EUR 15.2 billion in the first quarter of 2018. Exports of goods increased by EUR 0.7 billion (5.1 per cent) from the respective quarter of the year before. Exports of services amounted to EUR 6.4 billion, which was EUR 0.1 billion more than one year ago. Imports of goods to Finland at current prices were EUR 15.1 billion. Compared to one year ago, the value of imports of goods increased by EUR 1.0 billion (6.7 per cent). Imports of services amounted to EUR 6.8 billion, which was EUR 0.3 billion more than one year ago. The balance sheet of goods and services was almost in balance.

Property income received from abroad was around EUR 1.0 billion higher than property income paid abroad. Property income includes dividends, interests and reinvested earnings. Current transfers paid abroad from Finland were around EUR 0.6 billion higher than current transfers paid from abroad to Finland. The most significant current transfer item is the GNI payment paid by the state to the EU.

The current account was EUR 0.5 billion in surplus in the first quarter of 2018.

Data and methods used

The quarterly data become revised as source data are updated. The biggest revisions take place for the last two to three years, because the data in the annual accounts are still preliminary. Examined by quarter, the biggest revisions occur in the release for the second quarter at the turn of September and October and in the release for the fourth quarter at the turn of March and April. These revisions are caused by updated annual national accounts data. The data in the publication are based on the data sources available by 14 June 2018. The data for 1999 to 2017 mainly correspond with the annual sector accounts of the national accounts, although the updating of source data may cause differences to the previous annual accounts release.

The saving rate, profit share and investment rate in the quarterly publication of sector accounts are net amounts, i.e. consumption of fixed capital has been removed from the figures. The key indicators in these statistics were calculated as follows:

Households' saving rate = B8N / (B6N+D8R)

Households' investment rate = P51K / (B6N+D8R)

Profit share of non-financial corporations = B2N / B1NPH

Investment rate of non-financial corporations = P51K / B1NPH

The volume indicator, measuring the development of households' adjusted disposable income, adjusted for price changes and its change percentages can be found in Appendix table 3 of this publication. This volume indicator is calculated using the price data of the statistics on quarterly national accounts, with which the components of adjusted disposable income are deflated. Households' disposable income is deflated with the implicit price index of household consumption expenditure. Price data are also available for the consumption of non-profit institutions serving households. As a methodological shortcoming, general government individual consumption expenditure has to be deflated with the total general government consumption expenditure for lack of more accurate data. The volume time series was formed with the annual overlap method.

Source: Sector accounts, Statistics Finland

Inquiries: Pekka Tamminen 029 551 2460, Katri Soinne 029 551 2778, kansantalous.suhdanteet@stat.fi

Director in charge: Ville Vertanen

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Updated 21.6.2018