Unemployment marginally down at 9.1% in March
Economic prospects for Finnish industry are improving. While the Confederation of Finnish Industry (EK) reports that confidence among industry as a whole has improved significantly, the technology branch continues to lament its poor situation.
According to the EK, industrial confidence was nearly at the long-term normal level. There has been considerable improvement since March.
In addition to manufacturing, the construction industry is also showing greater confidence, and slight improvements are being seen in the service sector and commerce.
“The continued positive trend shows that demand, which has been been something that companies have been waiting for, is now being reflected in rising orders”, says EK economist Penna Urrila.
As if to confirm the trend, the steel manufacturer Outokumpu, which announced its first quarter result on Tuesday, said that demand for stainless steel had grown in the early part of the year.
However, in technology, the spirit has not quite become flesh, in that orders have not yet started to grow.
In fact, a slow recovery in orders took another dip in the early part of the year.
In monetary terms, companies earned 18 per cent less from orders in the first quarter than in the last three months of 2009.
“Our message is that the situation is not over”, says Jorma Turunen, managing director of the Federation of Finnish Technology Industries.
However, if the number of orders in January-March this year is compared to that of the same period last year, there was a slight increase. However, orders are nearly 50 per cent below what they were in the boom period of July-September 2008.
Turunen notes that there are companies in the technology industry that are doing quite well, but most are not.
The end of the year is usually the best of times for the technology industry, while the early months of the year tend to be more quiet. However, Turunen does not want to ascribe the situation to mere seasonal variation.
“This information involves current facts from the companies, and facts are facts”, Turunen says.
The technology sector is a major employer in Finland.
About 250,000 people worked for a technology company in March. During the current slump, about 27,000 people in the sector have lost their jobs, and about 37,000 are currently on temporary layoffs.
“A good thing is that most of the temporary redundancies have ended in continued work instead of permanent dismissals”, Turunen says.
This is borne out to some extent by the unemployment figures. The jobless rate did not climb from February to March, but actually declined marginally.
In March, 9.1% of the workforce were unemployed, down from 9.2% in February.
There is nevertheless little cause for throwing hats in the air and cheering, as the March figures do show 18,000 more people out of work than a year ago, and 240,000 unemployed. The unemployment rate has gone up by 0.8%-points in the past 12 months.
The EK’s perception of a general belief in improvements in the current situation, and recovery from the recession, is shared by the Finnish people.
Statistics Finland says that consumer confidence grew in April from the previous month. Confidence in the economy is significantly better than it was a year ago, and stronger than the long-term average.
Consumer confidence improved, especially expectations for employment and the Finnish economy in general. Faith in economic prospects was the strongest that it has been since 1994.
(HS International Edition Thursday 29.4.2010)
