Int´l trade in services grows significantly in Q4 2019

Service exports grew by 11 per cent in the fourth quarter of 2019 compared to the corresponding quarter in 2018.

Service imports grew by seven per cent, according to Statistics Finland.

Exports of services amounted to EUR 8.4 billion and imports to EUR 8.8 billion. The surplus of international trade in services prevailing in the third quarter of 2019 thus turned again into deficit.

According to preliminary data for 2019, service exports grew by 14 per cent compared to 2018. Imports of services grew by nine per cent in 2019. The development in the last quarter of 2019 thus follows the development in the whole year.

The combined exports of goods and services in balance of payments terms grew by seven per cent and imports fell by one per cent in the last quarter of 2019 compared with the corresponding quarter in 2018. In balance of payments terms, goods exports grew by six per cent and goods imports fell by five per cent.

According to preliminary data for 2019, the combined exports of goods and services went up by six per cent from 2018. Correspondingly, imports of goods and services grew by two per cent in 2019.

The levels in customs terms and in balance of payments terms can differ, because goods trade in customs terms includes flows of goods where ownership does not change. In contrast, goods trade in balance of payments terms is based on change of ownership. In addition to the changes made to the customs data, goods trade in balance of payments terms includes sales and purchases from aboard to abroad.

Telecommunications, computer and information services (ICT) covered 41 per cent of total service exports. The growth in this item continued strong, although the growth that accelerated during 2019 slowed down in the last quarter. Compared with the corresponding quarter of the year before, exports of telecommunications, computer and information services (ICT) grew by 59 per cent, while they went up by 84 per cent in the third quarter of 2019. It should be noted that the EUR 1.3 billion growth in exports of ICT services was bigger than in total service exports (EUR 0.8 billion). In other words, while exports of ICT services were growing strongly, exports of many other services went down compared to the corresponding quarter of the previous year. Exports items that fell most strongly were other business services and charges for the use of intellectual property n.i.e. Within other business services, exports of professional and management consulting services fell most strongly.

The differentiation of the development in exports of ICT services and other business services in the last two years is also essential when examining the development of exports. In the last quarter of 2017, exports of ICT services amounted to EUR 1.9 billion and exports of other business services to EUR 2.0 billion. In two years, exports of ICT services have started to grow strongly while exports of other business services have fallen. In the last quarter of 2019, exports of ICT services were two times bigger than those of other business services.

Growth in service imports continued more widely than exports similarly as in earlier quarters of 2019. Most imports concerned other business services, EUR 3.3 billion out of total service imports of EUR 8.8 billion. Nearly one third of the EUR 0.6 billion growth came from imports of ICT services, good two thirds from growth in other business services. Imports of manufacturing services and of charges for the use of intellectual property n.i.e. grew, but imports of transport and construction went down almost as much in terms of euros..

According to preliminary annual data, exports grew strongly in 2019 to the United States as well as particularly to China and countries outside Europe, America, Asia and Africa. If the trend continues, it will show before long in the relative shares of trading partners.

When examining service exports for the whole 2019 in terms of euros, the most increased item was ICT services, where the EUR 4.2 billion growth was larger than growth in total exports (EUR 3.9 billion). Charges for the use of intellectual property n.i.e. also grew by eight per cent, but the growth focused on the early part of the year. Financial and insurance services also grew by 10 per cent on the annual level but by just EUR 50 million in terms of euros. The EUR 0.5 billion fall in exports of other business services was biggest in terms of euros.