Finnish forest industry companies have a significant impact on our national economy and the well-being of Finns. This is evident in a recent survey conducted by EY Advisory Oy which assessed the impact of the forest sector, in other words, forest economics and the forest industry, on the national economy of Finland.

The revenues directly accrued by the forest industry in Finland in 2021 amounted to nearly EUR 33 billion, and with indirect impact included, that increases to EUR 45 billion. The direct and indirect added value accrued by the forest industry amounted to a total of nearly EUR 11 billion.

According to the survey, nearly 50% of the added value produced by the forest industry stems indirectly from work carried out in other industries. Value is produced by, for example, forest economics and timber harvesting, wholesaling, transport, storage and the energy industry.

The extensive Finnish value chain of the forest sector and the success on the international market is directly reflected on the industry's employment capacity. According to the survey, the forest industry directly employed nearly 40,000 people in Finland in 2021, and with indirect impact included, the number rose to about 83,000 people. The employment impact of the entire forest sector, including indirect impact, amounted to nearly 100,000 people.

- Despite the heavy economic fluctuations that are typical in this line of business, the forest industry has continued to have a significant impact on the national economy. An export-driven, competitive forest industry creates well-being throughout Finland, says Maarit Lindström, Chief Economist of the Finnish Forest Industries Federation.

Billions of euros in tax revenues and investments

According to the survey, the total tax revenues of the forest industry, including indirect impact, amounted to about EUR 3.1 billion in 2021, while the tax revenues of the overall forest sector amounted to more than EUR 3.8 billion.

In 2017–2021, forest industry investments in Finland, including indirect impact, amounted to an average of EUR 1.9 billion per year. While there are some annual fluctuations in investments, their level has remained high.

- Finnish forest industry companies operate in a highly competitive international market. It is important to ensure that companies continue to see Finland as a viable country for investment. A successful forest industry enables competitiveness and future investments that are vital for sustainable development while contributing to public economy, says Lindström.

Forest industry's role in national economy remains strong despite fluctuating economic cycles

This year, the demand for forest industry products in key market areas decreased compared to previous years. The impact of inflation, rising interest rates and full inventories combined with general uncertainty have been reflected in the demand for both wood products and chemical forest industry products.

- The forest industry is currently struggling with the current weak business conditions. However, the industry continues to work hard despite market cycles, which is why its impact on the national economy changes more slowly than individual quarterly results. The longer-term prospects for the demand for various forest industry products remain very positive, says Lindström.

* EY Advisory Oy: Forest industry’s economic impact in Finland