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Etla: Forest industry, car batteries will pull Finland out of Covid doldrums

A recovery in the forest products industry will boost the Finnish economy most through the end of next year, according to Etla Economic Research.

Kuvaa Vuosaaren satamasta
Etla says the Finnish economy is recovering in various sectors, with exports on the rise (file photo of Vuosaari Harbour). Image: Jyrki Lyytikkä / Yle
Yle News

The forest products industry, car batteries and other electrical and electronic industries are pulling Finland out of the coronavirus crisis, according to Etla Economic Research (previously the Research Institute of the Finnish Economy).

However, there are still question marks regarding the service and events sectors, the business think tank said on Wednesday.

Etla's industrial review indicates that numerous industries are now on a growth trajectory. The institute estimates that exports in the forest products industry will increase by about 15 percent this year, with paper exports up by 10 percent.

The forest industry accounted for 20 percent of the value of Finland's total exports of goods in January-August.

Exports of motor vehicles are expected to accelerate next year. Vehicles accounted for almost seven percent of Finnish goods exports during the first eight months of this year.

"It is estimated that half of the output of the Uusikaupunki car plant will go to the United States via Germany. A second battery plant is also being completed for Valmet Automotive, and in the next few years, the turnover of battery systems may even reach that of the vehicle manufacturing sector," said Etla researcher Birgitta Berg-Andersson.

In addition to cars, Etla estimates that total exports of ships and aircraft will grow by more than 20 percent this year.

It expects the output of the entire manufacturing sector to grow by four percent this year and three percent next year.

Hospitality industry to recover in 2022, events uncertain

According to Etla, the recovery in the Covid-hit hotel and restaurant sector will be strongest next year, and last until 2023. However there is uncertainty about the recovery, which would be undermined by a possible worsening of the pandemic.

"The recovery of the hotel and restaurant industry is indeed well underway, barring any major surprises. However, the recovery schedule in the cultural and events sector, which has been among the biggest victims, is still a question mark," says Markku Lehmus, Etla's Head of Forecasting.

According to Etla's prognosis, commercial sectors will return to normal during the next year. Retail has maintained a strong pace and the automotive branch has clearly recovered this year. However, sales of new cars are suffering from production and delivery problems, the institute noted.

Etla was set up by a consortium of manufacturing and employers' organisations in 1946. Its main funders include the Confederation of Finnish Industries (EK) and the Confederation of Finnish Industry and Employers (TT).

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