Our comprehensive assessment of Finland's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Finland, as well as the latest industry developments that could impact Finland's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Finland before your competitors.
Finland Country Risk
Over the short term, we believe that Finland's fiscal situation remains one of the most robust in Europe, and do not expect it to suffer from a ratings downgrade in the near future, expecting it to remain one of just four remaining countries in the eurozone to be awarded AAA status from all three major ratings agencies.
However, over a longer time horizon, looming structural challenges pose a threat to public debt dynamics and may impede fiscal flexibility. Several key sectors, including forestry and papermaking, shipbuilding and telecommunications remain in terminal decline, while high labour costs are acting as a deterrent for investment and importers of Finnish goods, despite strong structural competitiveness. This has cast doubt over the government's ability to sustainably increase aggregate demand through fiscal stimulus.
Finland Industry Coverage (8)
Finnish new vehicle sales have levelled off slightly over recent months, following growth of 4% over H114. Sales figures for the first nine months of 2014 from Finland's Automotive Information Centre (Autoalan Tiedotuskeskus - AT) state that a total of 93,540 vehicles (including 751 motor homes) were sold, representing 2.3% growth year-on-year (y-o-y). Breaking down the headline figure, passenger car sales stood at 82,336 units, up 2.9% y-o-y, while light commercial vehicle (LCV) sales were up by 0.2% y-o-y, at 7,947 units. Heavy commercial vehicle (HCV) sales were down by 15% y-o-y, at 1,939 units, while bus sales were up by 111% y-o-y, at 567 units.
Current sales trends would suggest a full-year outcome in the order of 124,720 units, very close to BMI's forecast of 124,007 units. Consequently, we are happy to maintain our forecasts this quarter.
Looking forward, the economic outlook remains...
Food & Drink
Finland Food & Drink
BMI View: The Nordics consumer outlook remains gloomy as the regional economies are expected to feel the negative effects of the slowdown in the eurozone. In 2014 and 2015 real GDP (year-on-year) growth in each country is not expected to exceed 2.8%. Heavy household debt load will continue to curb private consumption in Denmark and Norway, while Sweden and Finland will suffer from relatively high and sticky unemployment levels.
Food consumption (local currency) growth year-on-year (y-o-y) in 2014: +4.0%; compound annual growth rate (CAGR) 2013-2018: +4.9%
BMI View: Finland's construction industry value continued to decline in 2014, as the country remained trapped in a double dip recession and government infrastructure investment was restricted. After shrinking by 1.5% in 2014, the third consecutive year of decline, construction industry value is expected to show a subdued return to growth in 2015, of 1.13%, reflecting Finland's eventual return to GDP growth. This forecast is however dependent upon a less than certain return to growth in the eurozone, with any significant slow-down impacting heavily on the Finnish market.
Key Trends and Developments:
Although now stabilising, house prices are volatile and have shown some...
Finland Medical Devices
BMI Industry View: Finland has been one of the faster growing markets in Western Europe (WE), although growth has been modest by global standards. Whilst the large and expanding elderly population would indicate a steady rise in medical device consumption, increasing financial pressures on the healthcare system are likely to constrain future growth rates. Although Finland has a history of high quality domestic production, the majority of output is exported leaving the domestic market heavily dependent on imported products.
Headline Industry Forecasts
The medical device market was valued at US$1.020.7mn in 2013, equal to US$188 per capita, making it one of the smaller markets in WE. The market is projected to grow by a CAGR of 2.6% in US dollar terms and 4.6% in euro terms over the 2013...
Pharmaceuticals & Healthcare
Finland Pharmaceuticals & Healthcare
BMI View: Finland, like many other Western countries, has a mature pharmaceutical market where growth is slowing. Although an ageing population will drive the demand for high-value medicines for the treatment of long-term illnesses, drug manufacturers will be pressured to reduce drug prices as the government increases its cost-containment measures. Political uncertainty along with the country's weak economic outlook adds further downward pressure to our forecast.
Headline Expenditure Projections
Pharmaceuticals: EUR2.98bn (USD3.93bn) in 2013 to EUR3.04bn (USD4.07bn) in 2014;+2....
BMI View: With our fundamental assumptions for the three Nordic markets covered in this report unvaried, our forecasts for their power sectors remain largely unchanged this quarter. Overall, we maintain our view that, while growth expectations in the region are improving, economic woes in the eurozone remains a major risk factor for the consumption and generation outlook of the three Nordic countries, as more regional instability...
BMI View : With our fundamental assumptions for the three Nordic markets covered in this report unvaried, our forecasts for non-hydropower renewable energy generation in the Nordics remain largely unchanged. Key projects in the region continue to progress in line with our expectations, with Denmark's progressive loss of its energy self-sufficient status likely to lead the country to a greater focus on the prompt development of renewables. We also note that Sweden's possible phase-out of nuclear energy could jeopardise the reliability of the system, while pushing the country towards a larger share of renewable generation.
We are maintaining our 2014 forecast for non-hydropower renewable energy generation in the Nordics this quarter. This is because key projects in the region continue to progress in line with our expectations. For 2014, we expect non-hydropower renewable...
BMI View : Although Finland is a mature market with penetration rate around 181%, BMI believes that the growth has not yet reached its ceiling and the mobile market will expand until 2016. ARPU's, on the other hand will decline as the competition intensifies a trend which BMI believes will continue until the end of the forecast period. To keep a competitive edge, operators will have to focus on investing into high-bandwidth infrastructure such as fibre and LTE, but this is a capital-intensive undertaking despite the improved margins LTE at 800MHz would provide. Newcomer Ukko Mobile sees an opportunity in the LTE 450MHz market, but it will need to rely on innovative service bouquets if it is to stan...