Finland
In-depth country-focused analysis on Finland's economic, political and operational risk environment, complemented by detailed sector insight

Our comprehensive assessment of Finland's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Finland, as well as the latest industry developments that could impact Finland's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Finland before your competitors.

Country Risk

Finland Country Risk

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Core Views

  • Over the short term, we believe that Finland's fiscal situation remains one of the most robust in Europe, and do not expect it to suffer from a ratings downgrade in the near future, expecting it to remain one of just four remaining countries in the eurozone to be awarded AAA status from all three major ratings agencies.

  • However, over a longer time horizon, looming structural challenges pose a threat to public debt dynamics and may impede fiscal flexibility. Several key sectors, including forestry and papermaking, shipbuilding and telecommunications remain in terminal decline, while high labour costs are acting as a deterrent for investment and importers of Finnish goods, despite strong structural competitiveness. This has cast doubt over the government's ability to sustainably increase aggregate demand through fiscal stimulus.

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Finland Industry Coverage (7)

Autos

Finland Autos

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After a disappointing 2013, when sales fell by 6.9%, to 117,571 units, the Finnish new vehicle sales market has rebounded slightly over H114, rising by 4% year-on-year, to reach 66,220 units, according to figures from the Finland's Automotive Information Centre (Autoalan Tiedotuskeskus - AT). For the full year, BMI believes that this recovery can be maintained, targeting an increase of 5% for the sector as a whole.

Breaking down the headline figure, passenger car sales stood at 59,132 units, or 89.3% of total sales over H114, with commercial vehicles and buses making up the remaining 7,088 units (10.7% of total).

Our cautiously optimistic view on the Finnish new car sales market comes despite the fact that the economic outlook remains fairly downbeat. On the positive side, BMI's Country Risk team expects the country to finally exit recession in 2014; however, we believe...

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Food & Drink

Finland Food & Drink

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BMI view:  We believe the Nordics food and drink market will be picking up growth after the difficult 2012 and 2013. Increasing consumer focus on health and wellness will drive the sales of natural and high quality food products, which are expected to outperform over the forecast period to 2018. That said, we note that subdued   consumer outlook and uncertain economic environment will continue to limit the overall region's potential.

Key Forecasts

Denmark

  • 2014 total food consumption value (local currency) growth (year-on-year) in Denmark: +4.0%; compound annual growth rate (CAGR) to 2018: +4.9%

  • 2014 total soft drinks value sales...

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Medical Devices

Finland Medical Devices

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Espicom Industry View:   Finland has been one of the faster growing markets in Western Europe (WE), although growth has been modest by global standards. Whilst the large and expanding elderly population would indicate a steady rise in medical device consumption, increasing financial pressures on the healthcare system are likely to constrain future growth rates. Although Finland has a history of high quality domestic production, the majority of output is exported leaving the domestic market heavily dependent on imported products.

Headline Industry Forecasts

  • The medical device market was valued at US$1.020.7mn in 2013, equal to US$188 per capita, making it one of the smaller markets in WE. The market is projected to grow by a CAGR of 2.6% in US dollar terms and 4.6% in euro terms over the 2013-2018 period to...

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Pharmaceuticals & Healthcare

Finland Pharmaceuticals & Healthcare

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BMI View: An ageing population and the subsequent increased consumption of high-value prescription medicines for the treatment of long-term illnesses will place a greater strain on the finances of the national healthcare system. In the long   term, we believe this will result in stronger downward price pressures on medicines that treat long-term chronic diseases, with companies increasingly being required to prove the cost-effectiveness of innovative medicines in order to gain reimbursement .

Headline Expenditure Projections

  • Pharmaceuticals: EUR2.98bn (USD3.93bn) in 2013 to EUR3.04bn (USD4.07bn) in 2014;+1.9% in local currency terms  and 3.5% in US dollar terms. Forecast upwardly revised due to chan...

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Power

Finland Power

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BMI View:   With   our fundamental assumptions for the three Nordic markets covered in this report unvaried,   our forecasts for their power sectors remain largely unvaried this quarter .   Overall, we maintain our view that , while growth expectations in the region are improving, economic woes in the eurozone remains a major risk factor for the consumption and generation outlook of the three Nordic countries, as more pronounced financial stresses could undermine their economic...

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Renewables

Finland Renewables

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BMI View :   We are maintaining our forecasts for non-hydropower renewable energy generation in the Nordics this quarter as key projects in the region continue to progress in line with our expectations. We note that Denmark appears to be losing its energy self-sufficient status, and this is likely to lead to a greater focus on the development of renewables.

We are maintaining our 2014 forecasts for non-hydropower renewable energy generation in the Nordics this quarter. This is because key projects in the region continue to progress in line with our expectations. For 2014, we are forecasting non-hydropower renewable generation to grow by 5.9% in both Denmark and Sweden and by 2.5% in Finland.

We have also maintained our long-term forecasts for non-hydropower renewable generation in the region this quarter. We expect non-...

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Telecommunications

Finland Telecommunications

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BMI View :   Finland is a very mature market with penetration rate around 180%, therefore BMI believes that there is limited scope for growth. Intense competition has seen operator's ARPU's decline, a trend which BMI believes will continue until the end of the forecast period. To keep a competitive edge, operators will have to focus on investing into high-bandwidth infrastructure such as fibre and LTE , but thi s is a capital-intensive undertaking despite the improved margins LTE at 800MHz would provide. Newcomer Ukko Mobile sees an opportunity in the LTE 450MHz market, but it will need to rely on innovative service bouquets if it is to...

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