In Finland, investments have been weak for some time because of prolonged recession. For four straight years, investments have been declining. The volume of investments in 2015 was around the same as the volume in 2003. Total volume of investment declined 1.1%, whereas investments in intellectual property products such as R&D dropped by 4.8%. The slowdown in investments wears away future potential of growth, according to Danske Bank.
However, in Q4 2015, the investment volume rose 1.7% q/q. Investments in civil engineering and other structures expanded 5.6%, whereas investments in machinery, equipment and transport equipment grew 10.8% y/y.
Meanwhile, in 2016, housing construction is likely to expand strongly, noted Danske Bank. Housing permits and new starts show a surge in apartment construction in growth areas, particularly in Helsinki region. However detached houses construction is slow. The Confederation of Finnish Industries had had carried out an investment enquiry that indicated certain positive signs in investment planning of firms in Finland.
“We have revised our forecast slightly up and expect investments to recover modestly by 2.5% in 2016 and 4% in 2017”, says Danske Bank.
The plan of Finnish government to ease business climate of companies might slowly boost investments in the future, added Danske Bank.
