Finland Table of Contents
Several smaller sectors contributed significantly to industrial output. Food processing--concentrating on dairy products, baked goods, and preserved meats--grew during the postwar period, as rapid urbanization heightened reliance on processed foods. Indeed, as late as 1970 food processing was the largest sector in terms of gross value of production (but in terms of value added, food processing ranked only third that year, behind wood and metal processing). Nevertheless, during the 1970s and the 1980s, food processing suffered a relative decline.
In the 1980s, the food industry undertook an ambitious research program aimed at foreign markets. Finnish firms hoped to develop special foods for the cafeterias of hospitals, mines, and oil rigs as well as to develop delicacies, such as fresh berries and fresh-water fish. New technologies, such as plant and animal genetics, freeze-drying, irradiation, aseptic production, and methods to limit food oxidation, promised to improve the attractiveness of Finnish products. Another export was highly automated equipment for bakeries, dairies, and slaughterhouses. Although Finland's high production costs limited exports of staple foodstuffs, observers believed that the industry could expect to sell special products in Europe and in North America.
Finland's chemical industry, established at the time of independence, had come a long way by its seventieth anniversary in 1987. By the late 1980s, the sector ranked fourth after wood, metal, and food processing. Oil refining accounted for about half the gross value of chemical production, followed by fertilizers, plastics, fibers, rubber products, and other chemicals. Two large, state-owned firms controlled more than half of chemical production. Neste, established in 1948, was the only oil-refining enterprise. Its chemical operations had grown out of refining, while its rival, the Kemira Group, had developed interests in many products, including fertilizers, paints, fibers, and industrial chemicals. During the 1980s, both companies had purchased production facilities abroad in an attempt to remain on top in an international market that suffered from overcapacity in many basic product lines.
Construction, which accounted for almost 10 percent of GDP in 1950, declined to less than 8 percent of GDP during the postwar period, as the country completed its transportation and energy infrastructure and established heavy industry. In the short term, construction activities depended on the overall health of the economy. Thus, new building slumped from 1984 to late 1986 because of a recession and because many industries invested more in new machines than in new buildings. Residential construction was also slow in the mid-1980s, but it responded to financial stimuli after 1985. By late 1986, both commercial and domestic building were on the rise, increasing by an estimated 3 percent in 1987. Finland also exported construction services, especially to the Third World and to the Soviet Union, usually to complement exports of machine goods. The industry was able to offer clients all types of planning, engineering, and building services for turnkey factories.
Textiles and ready-made clothing, two of the country's oldest industries, concentrated on cotton, wool, and knitted goods. During the postwar period, this sector had declined in relation to other industries; however, in the 1980s, Finland still produced high-quality fabrics and fashions for export, especially to Europe. Likewise, Finnish fur and leather designs had carved out export markets in the developed countries.
Data as of December 1988