Economy of Finland
The economy of Finland has a per capita output equal to that of other European economies such as those of France, Germany, Belgium, or the UK. The largest sector of the economy is the service sector at 66% of GDP, followed by manufacturing and refining at 31%. Primary production represents 2.9%. With respect to foreign trade, the key economic sector is manufacturing. The largest industries in 2007 were electronics (22%); machinery, vehicles, and other engineered metal products (21.1%); forest industry (13%); and chemicals (11%). The gross domestic product peaked in 2008. As of 2015, the country's economy is at the 2006 level. Finland is ranked as the 7th most innovative country in the Global Innovation Index in 2021.
Finland has significant timber, mineral (iron, chromium, copper, nickel, and gold), and freshwater resources. Forestry, paper factories, and the agricultural sector (on which taxpayers spend around €3 billion annually) are important for rural residents so any policy changes affecting these sectors are politically sensitive for politicians dependent on rural votes. The Greater Helsinki area generates around one third of Finland's GDP. In a 2004 OECD comparison, high-technology manufacturing in Finland ranked second largest after Ireland. Knowledge-intensive services have also resulted in the smallest and slow-growth sectors – especially agriculture and low-technology manufacturing – being ranked the second largest after Ireland.
Finland's climate and soils make growing crops a particular challenge. The country lies between the latitudes 60°N and 70°N, and it has severe winters and relatively short growing seasons that are sometimes interrupted by frost. However, because the Gulf Stream and the North Atlantic Drift Current moderate the climate, Finland contains half of the world's arable land north of 60° north latitude. Annual precipitation is usually sufficient, but it occurs almost exclusively during the winter months, making summer droughts a constant threat. In response to the climate, farmers have relied on quick-ripening and frost-resistant varieties of crops, and they have cultivated south-facing slopes as well as richer bottomlands to ensure production even in years with summer frosts. Most farmland was originally either forest or swamp, and the soil has usually required treatment with lime and years of cultivation to neutralize excess acid and to improve fertility. Irrigation has generally not been necessary, but drainage systems are often needed to remove excess water. Finland's agriculture has been efficient and productive—at least when compared with farming in other European countries.
Forests play a key role in the country's economy, making it one of the world's leading wood producers and providing raw materials at competitive prices for the crucial wood-processing industries. As in agriculture, the government has long played a leading role in forestry, regulating tree cutting, sponsoring technical improvements, and establishing long-term plans to ensure that the country's forests continue to supply the wood-processing industries. To maintain the country's comparative advantage in forest products, Finnish authorities moved to raise lumber output toward the country's ecological limits. In 1984, the government published the Forest 2000 plan, drawn up by the Ministry of Agriculture and Forestry. The plan aimed at increasing forest harvests by about 3% per year, while conserving forestland for recreation and other uses.
Private sector employees amount to 1.8 million, out of which around a third with tertiary education. The average cost of a private sector employee per hour was €25.10 in 2004. As of 2008, average purchasing power-adjusted income levels are similar to those of Italy, Sweden, Germany, and France. In 2006, 62% of the workforce worked for enterprises with less than 250 employees and they accounted for 49% of total business turnover and had the strongest rate of growth. The female employment rate is high. Gender segregation between male-dominated professions and female-dominated professions is higher than in the US. The proportion of part-time workers was one of the lowest in OECD in 1999. In 2013, the 10 largest private sector employers in Finland were Itella, Nokia, OP-Pohjola, ISS, VR, Kesko, UPM-Kymmene, YIT, Metso, and Nordea.
The unemployment rate was 9.4% in 2015, having risen from 8.7% in 2014. Youth unemployment rate rose from 16.5% in 2007 to 20.5% in 2014. A fifth of residents are outside the job market at the age of 50 and less than a third are working at the age of 61. In 2014, nearly one million people were living with minimal wages or unemployed not enough to cover their costs of living.
As of 2006, 2.4 million households reside in Finland. The average size is 2.1 persons; 40% of households consist of a single person, 32% two persons and 28% three or more persons. Residential buildings total 1.2 million, and the average residential space is 38 square metres (410 sq ft) per person. The average residential property without land costs €1,187 per sq metre and residential land €8.60 per sq metre. 74% of households had a car. There are 2.5 million cars and 0.4 million other vehicles.
Around 92% have a mobile phone and 83.5% (2009) Internet connection at home. The average total household consumption was €20,000, out of which housing consisted of about €5,500, transport about €3,000, food and beverages (excluding alcoholic beverages) at around €2,500, and recreation and culture at around €2,000. According to Invest in Finland, private consumption grew by 3% in 2006 and consumer trends included durables, high-quality products, and spending on well-being.
In 2017, Finland's GDP reached €224 billion. However, second quarter of 2018 saw a slow economic growth. Unemployment rate fell to a near one-decade low in June, marking private consumption growth much higher.
Finland has the highest concentration of cooperatives relative to its population. The largest retailer, which is also the largest private employer, S-Group, and the largest bank, OP-Group, in the country are both cooperatives.
Energy
The free and largely privately owned financial and physical Nordic energy markets traded in NASDAQ OMX Commodities Europe and Nord Pool Spot exchanges, have provided competitive prices compared with other EU countries. As of 2007, Finland has roughly the lowest industrial electricity prices in the EU-15 (equal to France).
In 2006, the energy market was around 90 terawatt hours and the peak demand around 15 gigawatts in winter. This means that the energy consumption per capita is around 7.2 tons of oil equivalent per year. Industry and construction consumed 51% of total consumption, a relatively high figure reflecting Finland's industries. Finland's hydrocarbon resources are limited to peat and wood. About 10–15% of the electricity is produced by hydropower, which is low compared with more mountainous Sweden or Norway. In 2008, renewable energy (mainly hydropower and various forms of wood energy) was high at 31% compared with the EU average of 10.3% in final energy consumption. Russia supplies more than 75% of Finland's oil imports and 100% of total gas imports.
Supply of electricity in Finland
Finland has four privately owned nuclear reactors producing 18% of the country's energy at the Otaniemi campus. The fifth AREVA-Siemens-built reactor – the world's largest at 1600 MWe and a focal point of Europe's nuclear industry – has faced many delays and is currently scheduled to be operational by June 2022, over 12 years after the original planned opening. A varying amount (5–17%) of electricity has been imported from Russia (at around 3 gigawatt power line capacity), Sweden and Norway.
The Onkalo spent nuclear fuel repository is currently under construction at the Olkiluoto Nuclear Power Plant in the municipality of Eurajoki, on the west coast of Finland, by the company Posiva.
Commercial cruises between major coastal and port cities in the Baltic region, including Helsinki, Turku, Mariehamn, Tallinn, Stockholm, and Travemünde, play a significant role in the local tourism industry. There are also separate ferry connections dedicated to tourism in the vicinity of Helsinki and its region, such as the connection to the fortress island of Suomenlinna or the connection to the old town of Porvoo. By passenger counts, the Port of Helsinki is the busiest port in the world after the Port of Dover in the United Kingdom and the Port of Tallinn in Estonia. The Helsinki-Vantaa International Airport is the fourth busiest airport in the Nordic countries in terms of passenger numbers, and about 90% of Finland's international air traffic passes through the airport.
Lapland has the highest tourism consumption of any Finnish region. Above the Arctic Circle, in midwinter, there is a polar night, a period when the sun does not rise for days or weeks, or even months, and correspondingly, midnight sun in the summer, with no sunset even at midnight (for up to 73 consecutive days, at the northernmost point). Lapland is so far north that the aurora borealis, fluorescence in the high atmosphere due to solar wind, is seen regularly in the fall, winter, and spring. Finnish Lapland is also locally regarded as the home of Saint Nicholas or Santa Claus, with several theme parks, such as Santa Claus Village and Santa Park in Rovaniemi. Other significant tourist destinations in Lapland also include ski resorts (such as Levi, Ruka and Ylläs) and sleigh rides led by either reindeer or huskies.
Tourist attractions in Finland include the natural landscape found throughout the country as well as urban attractions. Finland is covered with thick pine forests, rolling hills, and lakes. Finland contains 40 national parks (such as the Koli National Park in North Karelia), from the Southern shores of the Gulf of Finland to the high fells of Lapland. Outdoor activities range from Nordic skiing, golf, fishing, yachting, lake cruises, hiking, and kayaking, among many others. Bird-watching is popular for those fond of avifauna, however hunting is also popular. Elk and hare are common game in Finland.
Finland also has urbanized regions with many cultural events and activities. The most famous tourist attractions in Helsinki include the Helsinki Cathedral and the Suomenlinna sea fortress. The most well-known Finnish amusement parks include Linnanmäki in Helsinki, Särkänniemi in Tampere, PowerPark in Kauhava, Tykkimäki in Kouvola and Nokkakivi in Laukaa. St. Olaf's Castle (Olavinlinna) in Savonlinna hosts the annual Savonlinna Opera Festival, and the medieval milieus of the cities of Turku, Rauma and Porvoo also attract curious spectators.
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