Productivity growth has been rapid in Northern Ostrobothnia
Productivity plays a key role in gross domestic product (GDP) growth. When labour input has decreased in Finland in the last decade, growth will depend on productivity and capital growth. Together with 11 other regional federations, the Ministry of Economic Affairs and Employment and the Association of Finnish Local and Regional Authorities, the Regional Council of Northern Ostrobothnia has commissioned a study on the development of productivity in the regions. The analysis is based on data from Statistics Finland's regional accounts on the development of value added and hours worked by industry in the regions in 2000-2018. The comparisons mainly focus on the period 2008-2018, but the year 2000 is the reference year for the productivity indices. Value added has been deflated to the price level in 2000 by means of price indices specific to each sector and province.
According to the report, labour productivity in the private sector was around EUR 41 per hour worked in Northern Ostrobothnia in 2018, which was the sixth highest among the regions and slightly higher than the level of the whole country. In Northern Ostrobothnia, the level of productivity is raised especially by the high productivity of processing.
Labour productivity growth in Northern Ostrobothnia between 2000 and 2018 was 34 %, the growth was second largest among the provinces immediately in Lapland (49 %) after. Lapland and North Ostrobothnia, Southwest Finland and North Karelia are regions where productivity growth has exceeded the national average, while in the other regions surveyed it is below the average.
Of the industries in Northern Ostrobothnia, only the productivity of the rental of dwellings and education industries has been higher than in the whole country during the whole period under review. Productivity growth in processing from 2000 to 2008 was more than 50%, of which it fell by half in 2018. The development of productivity in the private sector has been fastest in agriculture and forestry, education, information and communication, wholesale and retail trade and processing. Looking more closely at the processing industries, productivity growth has been fastest in the textile industry, metal processing, electrical and electronics industry and vehicle manufacturing.
In the regional economy of Northern Ostrobothnia, the share of processing in the region has been exceptionally high, but it decreased by one third in the 2010s and was around 30 per cent in 2018, due to structural change in the electronics industry. The electronics industry in Northern Ostrobothnia has recovered from the fall of 2008, but the industry's productivity is still at a much lower level than in the peak years.
The survey on regional productivity was carried out by Merit Economics Oy.
Provincial _productivity_20211101 (note)
For more information on the report, please contact:
Head of Research and Development Mikko Väisänen, telephone 050 3366 524
Specialist Ari Näpänkangas, telephone 050 433 3950
