Wednesday 10/28/20
BUSINESS

Coronavirus crisis wiped out a fifth of Finnish international trade

Travel to Finland, which is recorded as travel exports, was 87% lower in the second quarter than one year earlier. Travel from Finland abroad, or imports of travel, fell by 93%.
Dock-container-export

The coronavirus crisis wiped out almost a fifth of Finnish international trade. In the second quarter of 2020, when the pandemic shook the world, the combined exports of goods and services decreased by 18% relative to the corresponding quarter of the previous year.

International trade, or exports and imports, fell in both goods and services.

28% less services were exported and 22% less services were imported than in the previous year. The relative decrease in international trade was smallest in goods exports, which went down by 12%. Imports of goods, in turn, fell by 20%.

These data derive from Statistics Finland's statistics on international trade in goods and services, which are part of balance of payments.

Imports-exports-services-2q-2020

Source: Statistics Finland.

Exports of services fell by 28%

Exports of services and goods decreased in total by slightly over 4 billion euros compared with the second quarter of the previous year.

In the second quarter of 2019, goods amounting to 15.8 billion euros and services amounting to 7.9 billion euros were exported from Finland, but in the corresponding quarter of 2020, the value of goods exports was 13.8 billion and that of service exports 5.7 billion.

Thus, exports of goods diminished by 12% and exports of services by 28%.

In terms of service exports, especially exports of travel and transport services developed weakly and the value of these two items fell by a total of 1.3 billion euros. The ratio of the contraction of exports of travel and transport to the fall in total service exports was thus as much as 59%.

Travel industry collapse

Travel to Finland and from Finland abroad has decreased clearly. Travel to Finland, which is recorded as travel exports, was 87% lower in the second quarter of 2020 than one year earlier. Travel from Finland abroad, or imports of travel, fell by 93%.

In the second quarter of 2019, income from exports of travel amounted to 0.7 billion euros, while the value of imports of travel was 1.3 billion euros. In the second quarter of 2020, the value of both exports and imports of travel was slightly under 0.1 billion euros.

International trade in transport services depends on the state of international trade in both travel and goods, which was not favourable. The value of exports of transport services was 1.1 billion euros in the second quarter of 2019, but in the past quarter it had fallen to 0.5 billion. Transport exports thus declined by 59%. Imports of transport services also decreased clearly.

exports-of-services-2q-2020

Source: Statistics Finland.

ICT exports

In other service items, exports contracted most in charges for the use of intellectual property. Their total value in the second quarter of 2019 was 1.1 billion euros and the fall from this level was around 0.5 billion euros.

Although the value of the item decreased by as much as 43%, its level has not changed as much compared to the other quarters of 2019. A significant decrease was also recorded in the exports of telecommunications, computer and information services (ICT), which decreased by 0.2 billion euros.

However, exports of ICT continued to be the largest item in service exports valued at 2.5 billion euros. In addition, the value of exports of manufacturing services decreased by 0.2 billion euros from its level of 0.5 billion euros one year ago, which corresponds to a contraction of around one third.

Imports of services also fell in the second quarter of 2020 and it is explained, as in exports, by the steep decline in travel and transport.

However, imports of certain service items increased compared to the second quarter of 2019. Especially imports of ICT services grew by 101 million euros or 10%. In addition, charges for the use of intellectual property and imports of construction and manufacturing services increased slightly. By contrast, imports of other business services decreased by 175 million euros.

In particular, imports of research and development services belonging to this item decreased by 133 million euros.

Europe, the biggest market

The value of exports to Europe contracted by 3.3 billion euros from the respective quarter of the year before. Because the value of total exports decreased by 4.2 billion euros, the ratio of the drop in European exports to the drop in all exports was as high as 79%.

In the past quarter, goods and services for a total of 12.9 billion euros were exported to Europe, while the corresponding figure last year was 16.2 billion euros.

The fall in exports was great especially concerning Sweden and Germany.

Measured in relative terms, service exports to Europe in general went down by 32% from the quarter one year ago, or more than goods exports, where the corresponding contraction was 15%.

Europe's share of Finland's exports was 66% and it did not significantly decrease from the year before. Exports to America went down by 0.7 billion euros, which is due to the contraction of exports to the United States by one third from one year ago. Most of this is caused by a drop in goods exports.

Exports to Africa decreased less and exports to Asia did not change much from their 3.3 billion euros level. Among Asian countries, exports to China, however, grew by as much as 69% from one year ago.

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