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 the first quarter of 2015 from Finland's Automotive Information Centre (Autoalan Tiedotuskeskus - AT) bear out BMI's short-term pessimism towards the local autos sales market. Finnish new vehicle sales were down by 2.8% year-on-year (y-o-y) over Q115, at 32,990 units. Breaking down the headline figure, passenger car sales stood at 29,355, down by 2.7% y-o-y, while light commercial vehicle (LCV) sales were up by 9% y-o-y, at 2,945 units. Heavy commercial vehicle (HCV) sales were down by 12.9% y-o-y, at 590 units, while bus sales were up by 47.1% y-o-y, at 100 units.
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%. Leading indicators point towards a stagnant outlook for Finland's economy in 2015. Over the short...
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 potentially hold lots of attractive investment opportunities. That said, we note limited opportunities for growth as the economic and demographic outlook remains relatively grim and the food and drink markets are highly concentrated, thus presenting significant challenges for new entrants.
Food consumption (local currency) growth year-on-year (y-o-y) in 2015: +3.6%; compound annual growth rate (CAGR) 2014-2019: +4.5%
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: 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, economic woes in the eurozone remain a major risk factor for the consumption and generation outlook of the three Nordic countries, as more regional instability could undermine their economic activity. In terms of sector trends, we note Denmark appears to be losing its energy self-sufficient status...
BMI View: This quarter our projections for non-hydropower renewable energy generation in Denmark, Finland and Sweden remain largely unchanged, as our fundamental assumption for the Nordic markets considered in the report remain unvaried. 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. Meanwhile, Finland's continuous reliance on hydropower and nuclear energy works against...
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...