What Does Finland Export to Germany: Trade Trends and Industry Analysis
Finland and Germany have a long-standing trading relationship, with both countries consistently making significant contributions to each other's commerce. This article explores the trends in Finnish exports to Germany, focusing on the period prior to the coronavirus pandemic as well as recent developments. We'll delve into the major industries, both growing and declining, to provide a comprehensive overview of the current state of Finnish-German trade.
Overview of Finnish Exports to Germany
According to the German-Finnish Chamber of Commerce and data from Finnish Customs, Finnish exports to Germany experienced a slight dip in 2021 compared to 2019. However, once a massive cruise ship delivery to Germany in 2019 is accounted for, Finnish exports actually saw a slight increase of 2 percent. This indicates that while the 2021 year-over-year comparison shows a slight decrease, the underlying trend might be more stable.
High-Value-Added Exports
One of the most positive developments in Finnish exports to Germany is the resurgence in high-value-added motor vehicle exports. This sector, which includes vehicles and significant components, saw a modest 3.1 percent drop from 2019 to 2021. Notably, a single large-order cruise ship delivery to Germany in 2019 skewed the 2019 figures, making the year-over-year comparison less meaningful for this industry.
The trend in high-value-added motor vehicle exports demonstrates Finland's continued success in maintaining its strong position in the automotive supply chain for Germany. This sector not only holds economic importance but also reflects Finland's strong manufacturing capabilities and technical competencies.
Growth in Electrical Machinery and Equipment
A particularly exciting trend in Finnish exports to Germany has been the sharp rise in the export of electrical machinery and equipment. This sector saw an astonishing 93.0 percent increase, with exports nearly reaching 600 million euros. This growth indicates a strong global demand for Finnish-manufactured electrical machinery and equipment, suggesting robust market acceptance and a competitive edge in high-tech industries.
This sector's growth can be attributed to Finland's reputation for innovation and high-quality manufacturing. Finnish companies are known for their expertise in electrical and electronic products, which aligns well with Germany's industrial and technological advancements.
Declining Industries: Wood and Paper, and Metals
Unfortunately, not all sectors in Finland to Germany trade have experienced growth. The wood and paper industry, historically a cornerstone of Finland's exports, saw a significant decline in 2021. Exports of paper pulp fell by 18.8 percent to around 265 million euros. Similarly, exports of paper and cardboard experienced a 13.1 percent decline, delivering an approximate value of one billion euros.
While these declines may signal some challenges, they also present opportunities for strategic restructuring and innovation. Finland's forestry sector could explore diverse export markets and focus on more specialized products to regain market share. The paper and cardboard industry could also benefit from diversification, considering new market demands and technologies.
Iron and Steel Exports
Another industry that showed growth, albeit at a slower pace, is iron and steel. Exports of iron and steel and other metals to Germany reached a value of 1.5 billion euros, with a modest 13.1 percent increase. This sector benefits from Finland's abundant natural resources and advanced metallurgical capabilities. However, the growth in this sector is more gradual compared to the high-value-added and electrical machinery sectors.
Going forward, Finland could focus on developing sustainable and high-quality products to strengthen this industry's position in the German market and beyond.
Imports From Germany
Meanwhile, imports from Germany to Finland have also shown a positive trend, increasing by 5.6 percent. This improvement suggests that the overall trade relationship between the two countries is thriving. The rise in German imports indicates that Finnish companies are able to meet the demands of the German market more effectively, potentially leading to improved economic ties and mutual benefit.
Finnish businesses can leverage this trend to further collaborate with German counterparts, exploring new opportunities for joint ventures, partnerships, and market expansion.
Future Outlook and Strategic Considerations
Based on the current trends, Finland's ongoing efforts to innovate and diversify its export portfolio will be crucial for sustaining growth. The success of high-value-added sectors and rapid growth in electrical machinery and equipment indicate that Finland is well-positioned to compete in advanced industries. However, strategic responses to the decline in wood and paper industries, as well as efforts to maintain and grow the iron and steel industry, will be vital for the overall economic health of the Finnish-German trading relationship.
As the global economy continues to evolve, Finland will need to remain agile and innovative to capitalize on new opportunities and mitigate risks in traditional industries. Collaboration with German partners and embracing digital transformation will be key to achieving sustainable and robust trade relations in the future.
In conclusion, Finnish exports to Germany reflect a mixed but largely positive picture, with notable growth in high-value-added and electrical machinery sectors, albeit challenges in the wood and paper industries. By capitalizing on strengths in advanced manufacturing and technology, Finland can maintain its position in the global economy.