Finnish goods exports fall year-on-year in December, nominal exports likely to expand in H1 2017

Finland’s goods exports dropped in December on year-on-year terms. The data released today showed that goods exports fell 4.7 percent year-on-year, in line with expectations.  The significantly large decline in exports is mainly due to a strong point of comparison in December 2015. For the whole of 2016, exports of goods dropped 4 percent. The trend of quarterly nominal exports is nearly flat in 2016 with the fourth quarter indicating a small fall from the year earlier.

Therefore, there is no proof of a rebound in exports, noted Nordea Bank in a research report. The quarterly data filters out a great amount of noise present in the monthly data and thus produces a more reliable trend estimate, stated Nordea Bank.

Finland’s exports to the euro area and elsewhere in the EU indicate a flat or a marginally falling trend. A small rebound could be seen only in exports to outside the EU. This rebound is mainly driven by the U.S.

In the coming months, prices might have a major role here. Following a sharp decline, export prices bottomed out in early 2016. While the export price index registered a decline of about 5 percent year-on-year in late spring, it indicated a rise surpassing 2 percent already in December. Therefore, the end of the year prices underpinned nominal exports, while in the earlier part of the year prices were a drag.

“With the new price trend we should see nominal exports expand in H1 2017 even in the case that volumes are flat or even shrink a bit”, added Nordea Bank.