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
Finland's economy is facing a number of cyclical and structural headwinds that are dragging on growth. Without structural reform, poor competitiveness will ensure that growth remains weak.
The new government has put forward a much needed economic reform package, but it remains to be seen whether it can be successfully implemented.
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...
Finland Industry Coverage (8)
Sales figures for H115from Finland's Automotive Information Centre (Autoalan Tiedotuskeskus - AT) bear out BMI's pessimism towards the local autos sales market.
Finnish new vehicle sales were down by 2.7% y-o-y during H115, at 64,454 units. Breaking down the headline figure, passenger car sales stood at 57,085 units, down by 3.5% y-o-y, while light commercial vehicle (LCV) sales were up by 7.8% y-o-y, at 5,824 units. Heavy commercial vehicle (HCV) sales were up by 0.9% y-o-y, at 1,361 units, while bus sales were down by 45.4% y-o-y, at 184 units. This made for a total CV sales market of 7,369 units, up 4% y-o-y.
Looking forward, we remain downbeat on the new vehicle sales outlook for 2015. BMI's Country Risk team continues to hold a below-consensus forecast for real GDP growth in 2015 of -0.1%. If achieved, this would mark Finland's fourth...
Food & Drink
Finland Food & Drink
BMI View: Boasting a consumer base of 25mn with some of the strongest purchasing power in the world and offering a favourable business and regulatory environment, the four Nordic markets could offer attractive investment opportunities. That said, there are limited opportunities for growth, as the economic and demographic outlook remains relatively grim. Moreover, the food and drink markets are highly concentrated, presenting significant challenges for new entrants.
BMI View: We had forecast Finland's construction sector to see its third consecutive year of decline in 2014, contracting by a sharper-than-expected 3.6%, a figure confirmed by the national statistics agency in March. We had previously expected another year of contraction in 2015, but this is starting to improve on the previous year. However, with the economy forecast to contract by 0.1%, we have significantly downgraded our 2015 industry view to a 4.5% contraction. A worsening economic picture, falling GFCF, a troubled eurozone and the escalating impact of Russian sanctions are affecting the prospects for sector growth in Finland. There are, however, a significant number of transport and utility infrastructure projects in the pipeline, but not enough to generate a strong long-term growth outlook for the industry.
Key Trends And Developments
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 2013-2018 period to attain a value of US$1.2bn by 2018....
Pharmaceuticals & Healthcare
Finland Pharmaceuticals & Healthcare
BMI View: Finland's growing and ageing population will drive pharmaceutical demand. Despite being relatively small in size compared to some of its Western European counterparts, the market is boosted by high GDP per-capita, ensuring continued spending on high-value drugs in the medium-term. However, rising healthcare costs will place a heavy burden on government finances, requiring patented drug makers to prove the cost-effectiveness of their medicines over less expensive generic drugs.
Headline Expenditure Projections
Pharmaceuticals: EUR3.04bn (USD4.08bn) in 2014 to EUR3.10bn (USD3.41bn) in 2015;+1.9% in local currency terms and -16.4% in US dollar terms....
BMI View: This quarter we have revised down our wind power forecast for Sweden to take into account policy uncertainty over the country's regulatory framework. This in turn has marginally altered downwards the overall forecasts for the country. That said, our fundamental assumptions for Denmark, Finland and Sweden continue to be relevant. We maintain our long-held view that, while growth expectations in the region are improving,...
BMI View: We have revised down our forecasts for non-hydro renewables power in the Nordics this quarter, as Denmark will face problems in integrating additional intermittent wind power to the grid due to its saturated power market and high wind penetration, Swedish energy policy uncertainty mutes investor interest in country's sector and Finland suffers from a relatively weak macroeconomic outlook whilst continuing to aim for a nuclear expansion. We highlight that there are upside risks to our muted growth forecasts in all markets, as better interconnections capacity coupled with a smarter power grid will enable...
BMI View : Finland is a mature market with a penetration rate around 180% and BMI believes that there is little scope for organic growth opportunities, with the market beginning to decline from 2018. ARPUs will decline as the competition intensifies a trend that 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...