News 27 May 2021
Statistics Finland and OECD reports examine the economic development of the COVID-19 period and manufacturing enterprises in global value chains
Statistics Finland and the OECD have published two joint reports on the impact of the COVID-19 pandemic on the Finnish economy and on the indicators of value added-based international trade by means of more detailed data.
How will the Finnish economy recover from the corona pandemic?
The Finland: Road to recovery after COVID-19 report looks at developments in the economy, international trade and employment during the COVID-19 pandemic and analyses the effects of the development through global value chains.
Finland’s economy has fared well with respect to what the OECD earlier expected, but the corona pandemic will affect many industries, enterprises and employees for an extensive period of time.
“Several manufacturing industries seem to have already recovered from the worst turmoil of the COVID-19 pandemic, but the recovery of service industries is still unclear. The year of the pandemic also boosted individual industries as increased remote work produced additional demand for ICT products and services,” says Senior Statistician Pontus Lindroos.
The decrease in international trade seems to have hit more heavily the exports of large enterprises than those of SMEs. In the third quarter of 2020, the exports of large enterprises declined by over 20 per cent compared with the previous year, while the fall for SMEs was around six per cent. However, the decrease in exports also has a strong impact through domestic value chains, as demand also decreases for sub-contracting.
Young, female, low-skilled and low-paid workers have been overly represented among laid-off persons during the COVID-19 pandemic. However, generous support packages for enterprises and employees as well as temporary changes in legislation have helped keep the economy afloat. The OECD projects a full economic recovery for Finland in the coming two years.
The results of the report will be presented in a webinar organised by Statistics Finland on 3 June 2021.
Large manufacturing enterprises strongly involved in global value chains
The report entitled Measuring trade in value-added for Finland: A comparison of granular value-added trade estimates and OECD TiVA database describes in more detail the differences between Statistics Finland’s value added-based trade indicators and the OECD’s Trade in Value Added (TiVA) indicators as well as the value chain integration of manufacturing industries.
More detailed data show, for instance, that Finnish enterprises are more actively integrated in global value chains than the OECD’s TiVA framework estimates. According to more detailed data, the share of foreign value added in exports, which is one of the most important indicators of global value chain integration, is over 10 percentage points higher than the OECD's estimate.
When value chain participation is broken down by industries and enterprises’ characteristics, differences in value chain integration are also seen within industries. The value chain integration of Finnish enterprises is borne by large enterprises, at least in manufacturing industries.
“Involvement in global value chains and access to foreign markets requires considerable resources and large companies are better placed to cover these expenses. For small enterprises, some light can be seen in the machinery industry and in ICT industries, where small enterprises export more than average of their production to foreign markets,” Pontus Lindroos says.
Statistics Finland and the OECD have jointly developed statistics on value added-based international trade
Over the past few years, Statistics Finland and the OECD have jointly invested in the development of statistics on value added-based international trade. As the first result of their cooperation, the agencies published a report in 2020 ”Globalisation in Finland: Granular insights into the impact on businesses and employment”, where the value chain integration of Finnish enterprises was examined in the light of new data. Last year, Statistics Finland also published indicators of value added-based international trade as experimental statistics for the first time. The now published reports continue the joint development and analysis work.
The joint reports of Statistics Finland and the OECD have been funded by the Ministry for Foreign Affairs.
The reports are available on the OECD website.
Further information: Senior Statistician Pontus Lindroos, tel. +358 29 551 3242