Over 10,000 jobs already lost in Finnish forestry sector

Finnish forestry’s contribution to the national economy has dropped by half since the start of the new millennium.

The golden days of the Finnish forest industry are now nothing more than a memory. According to the Pellervo Economic Research Institute (PTT), the forest industry’s share of Finland’s gross domestic product (GDP) now constitutes less than three per cent. The rapid speed of the change is shown by the fact that the industry’s share of GDP has halved since the turn of the millennium.

Tapio Tilli, forest economist at PTT, asserts that in recent years the difficulties for the forest industry have primarily resulted from the crisis in the pulp and paper industry. On account of the downturn, severe cost-cutting is increasingly being implemented at sawmills and elsewhere in the mechanical forest industry. The share of Finnish exports occupied by the forest sector was still one quarter in the early part of the current decade, but by last year it had fallen to under one fifth.

Following all the reorganisation of businesses, capacity in a large part of Europe’s forest industry is suffering from underutilisation in the whirlwind of the recession. The companies have stated that, as far as Finland is concerned, they have no new lists of cuts up their sleeve. However, for as long as the recession is putting downward pressure on the demand for forest industry products, new rounds of reorganisation are still possible.

Major significance

The problems faced by the forestry industry are also starkly evident in the number of jobs in the sector. The greatest loss of jobs has been in the pulp and paper industry. According to statistics from PTT, last year the Finnish forest industry employed less than 60,000 people. Since the turn of the millennium, jobs in the sector have rapidly decreased by more than 10,000.

Despite these numbers, even up to one in ten Finns are said to be directly or indirectly dependent on the forest industry. “The forestry industry uses substantially more domestic input than other industrial sectors, and for this reason its influence is reflected on the rest of the economy to a greater extent than that of other industries,” Tilli reported.

It is for this reason also that the forestry industry has disproportionately large significance for the Finnish economy as a whole. In many parts of the country, the forest industry and the forest economy are still very important. Jobs in tree-felling and the stumpage revenue from wood sales, amongst other things, are the backbone of the economy in many localities. According to PTT, the forest industry’s share of Finnish GDP remains at more than two per cent.

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Issued by:  Helsinki Times

Author: Olli Kuivaniemi

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Issue date: August 22, 2009

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