Finnish forest industry investment declines 13% in 2014

28 January 2015 by Stephen Powney

Finnish forest industry investment declined by more than 13% to €573m, according to research by the Confederation of Finnish Industries.

And the forest industry has also lost its position as the largest investor among industries in Finland. The largest investor last year was the chemical industry with a sum of €1.04bn, followed by the machinery and metal products sector with €717m and the food industry €616m, leaving the forest industry a distant fourth.

The confederation is predicting little change in this situation, even though it believes the forest industry will see a slight increase in investment of 1.8% to €584m in 2015.

Final decisions have not yet been taken on the most extensive investment plans in the sector.

"Companies normally only inform us about investment plans that have been formally adopted," said Penna Urrila, leading confederation economist.

A significant 49% of the forest industry's investments this year are geared to creating new capacity, compared to 38% for the food industry and 29% for the chemical sector.

A share of 23% of the forest sector's investment plans in 2015 is to be used for capacity replacement.

In 2014, the number of employees of the Finnish forest industries decreased by only 0.6% from the previous year, while the corresponding figure for their operations in other countries was 1%.

Among the factors affecting the investments by the forest industry, predicted demand was clearly the most significant. Estimates on the effect of financing and predicted profit varied: the share of respondents saying they had a significant effect was about the same as of those saying they had little effect.