Finland: Economy slowed in April but expected to pick up in May
July 28, 2011
In April, economic activity slowed to a working-day adjusted 3.2% increase over the same month last year, based on to Trend Indicator of Output. The figure represented a significant deterioration over the 5.5% expansion tallied in March and was the result of slower growth in the secondary sector, which comprises manufacturing and construction, as well as in services. On a monthly basis, the economy posted an outright contraction of 0.9% in seasonally adjusted terms. However, data suggest that April's moderation was transitory and that growth picked up in May, pointing to a strong second quarter. Mirroring other parts of the world, the external sector recovered from disruptions stemming from the Japanese disaster. In May, Finnish exports rebounded from a revised 5.9% expansion in April to a solid 16.0% increase. Moreover, imports soared to a 27.2% increase, well above the 16.4% expansion seen in April, underscoring strong domestic demand. In addition, industrial output maintained the pace observed earlier by expanding 6.0% in May, just a notch below the 6.2% increase recorded in the previous month. On the negative side, consumer confidence made a weak start to the third quarter. In July, consumer sentiment was virtually unchanged from the previous month at 11.3 points. The print marked the second consecutive month that the index lingered below its long-term average and marked the lowest level since August 2009.