Finland's industry confidence rose to a two-year high in the first quarter of 2004, with firms expecting export growth to continue in coming quarters, the country's top industry body said on Thursday.
The Confederation of Finnish Industry and Employers (TT) said its January-March industry confidence barometer jumped to 29 points from 19 points in the fourth quarter of 2003. The figure is the highest since the first quarter of 2002.
The optimistic outlook comes despite weak industrial output data for the last few months, which economists say puts current economic growth forecasts at risk, as strong private consumption alone is not enough to buoy the economy.
Seasonally adjusted industrial output rose 0.2 percent month-on-month in March, the same pace as the previous month, but was flat versus a year ago, according to statistics office data from last week.
"Certainly the producers look more optimistic about export outlook, but current conditions are still seen as quite weak," said Sampo Bank Chief Economist Tarja Heinonen.
She added that the high expectations did not yet indicate that Finnish industry had put recent difficulties entirely behind it.
"If we compare the situation now and in 2002, there is one clear difference: a better outlook for Asian and US markets. But when it comes to the realisation of these expectations, factors like currency rate development are adding uncertainty."
The outlook for the technology sector, which is led by the world's top mobile phone maker Nokia, rose to 40 points versus 27 points in the previous quarter and nine points in January-March 2003.
The forestry sector, another export stalwart featuring top global magazine paper maker UPM-Kymmene and Europe's top fine paper maker M-real, saw its outlook rise to 19 points, a seven-quarter high, from 12 in October-December.
"In many industries like forestry we are seeing a traditional-looking cycle upturn," said Chief Economist Tiina Helenius at Handelsbanken in Helsinki.
"In line with the whole euro zone we have suffered...mostly due to a prolonged effect of the strong euro and now these signs show we are getting back to the upward cycle."
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