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Finland's July manufacturing orders plunged almost 30 percent

The value of new manufacturing sector orders fell by 28.5 per cent year-on-year, according to Statistics Finland.

Metsäteollisuusyhtiö UPM aikoo sulkea Kaipolan paperitehtaan.
The largest decline in output was in the manufacture of paper products. Pictured is UPM's Kaipola mill which the company intends to close. Image: Jussi Nukari / Lehtikuva

Statistics Finland reports that overall the value of new orders in the nation's manufacturing industry was 28.5 percent lower in July of this year than twelve months earlier. During January to July, overall orders decreased by 14.3 percent from 2019 levels.

The decline was greatest in the metal industry and in the manufacture of paper and cardboard products, both of which fell by more than 30 percent. In the chemical industry, orders fell by about eight percent.

In its report, Statistics Finland stresses that it should be borne in mind that these figures typically show strong fluctuations by month. Even new orders of substantial value are not reviewed over extended time periods, but only for the statistical reference month.

In a recent Twitter posting, Danske Bank economist Jukka Appelqvist wrote that July's figures are as bad as expected, but not as terrible as they appear at first glance. Appelqvist referred to a very strong influx of orders last year that the comparison is based on.

Timo Vesala, Chief Economist of Municipality Finance, wrote that the impact of the coronavirus crisis will continue into the future.

"Unfortunately, the continuing decline in new orders does not bode well for the upcoming months," Vesala stated.

On Thursday morning, Statistics Finland also published data on industrial output volumes. These show that industrial output adjusted for working days was 6.1 percent lower in July 2020 than in July 2019, but up by 0.9 percent from the month before.

Prior to July, industrial output showed a decline over the previous three months. OP Group's Chief Economist Reijo Heiskanen recently stated in a Twitter posting that based on figures from July, industrial output had bottomed out in June.

"Orders were at the same level as in May and June. This will gradually increase in line with the export market," Heiskanen commented.

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