By James Devlin and Maryanne Lyons
U.S. trade with the Nordic region is feeling the effects of the economic downturn. U.S. exports to the region in 1991 rose only 1.4 percent, to $7.5 billion, the lowest growth in many years. U.S. imports from the region declined 7.9 percent, narrowing the U.S. trade deficit with the region to a long-time low of $1.6 billion. The Nordic economies are sluggish. GDP declined almost 1 percent in 1991 and is expected to remain flat in 1992, a performance below the OECD average. Nordic economic prosperity depends on exporting. Thus, an upturn will not come until the economies of the region's major trading partners begin to show improvement.
Despite the economic slowdown, this highly industrialized region has a sound economic base and an exceptionally high standard of living. It is a market with excellent potential for American suppliers. The favorable exchange rate is also providing impetus for buying U.S. goods. There are opportunities for the sale of industrial machinery, computers and related equipment, electronic components, telecommunications equipment, computer software, and industrial supplies.
The five nations of the region--Denmark, Finland, Iceland, Norway, and Sweden--have many commonalities, but each is a separate market. U.S. exporters should look closely at each of them. U.S. companies interested in doing business there should contact the Commerce Department Desk Officers at (202) 482-3254 or 377-4414.
Norway. Despite low economic growth, U.S. exports to Norway reached a record level in 1991 of $1.5 billion, up 16.2 percent over 1990. With weakness in Norway's demand for imports, U.S. sales are not expected to grow substantially this year. Norway, however, remains an excellent market for U.S.
U.S. exports 1991--$1.5 billion U.S. imports 1991--$1.6 billion
suppliers, importing a wide range of American products. When business activity in the non-oil sectors improves, U.S. firms should again make strong gains. The leading categories for U.S. sales were aircraft and associated equipment, and equipment and supplies for the offshore oil and gas industry.
Norway's economy, with the exception of the oil and gas industry, is stagnant. Real GDP, up 2.6 percent in 1991, would have shown no growth without the strong performance of the oil industry. Rising production and investment activity in the oil sector should help boost GDP in 1992. Unemployment, already at a record high of 9.3 percent, is expected to rise further this year. Inflation has fallen to a record low of 2.4 percent. The non-oil economy is not expected to improve until 1993. One bright spot for Norway's economic future is the substantial deals being negotiated for the long-term sale of natural gas to the U.K. and the Continent.
Some products with good sales potential are computers, industrial process controls, medical equipment, computer software, communications equipment, and electronic components. Norway's offshore oil and gas industry continues to need U.S. technology. To assist U.S. suppliers, the Commerce Department will mount a pavilion at Norway's Offshore Northern Seas Exhibition, Aug. 25-28.
Sweden. U.S. exports to Sweden, off 3.4 percent in 1991, reflected the slump in the Swedish economy, but were a substantial $3.3 billion, almost 45 percent of U.S. sales to the Nordic region. Sweden is a good market for U.S. industrial equipment and technology.
U.S. exports 1991--$3.3 billion U.S. imports 1991--$4.5 billion
U.S. exports to Sweden this year are not likely to show much growth until business activity picks up. When it does, U.S. suppliers should be poised to take advantage of supplying the needs of Swedish industry. Among the products which have good potential in the Swedish market are telecommunications equipment, computers and computer software, electronic components, aircraft and related equipment, and medical equipment. Sweden has relaxed restrictions in several areas such as investments and telecommunication services, creating new opportunities for U.S. business.
Sweden's economy is in a deep downturn as real GDP declined 1.2 percent in 1991 and is not expected to show any growth until 1993. Industry is going through a period of adjustment. Forecasts are that unemployment, now at 4 percent, might double before showing any improvement. Even after an upturn, Sweden's traditionally low unemployment rates are not expected to return to their former levels. Despite these problems, Sweden's economy is moving toward greater harmonization with the European Community, which it hopes to join by 1995.
Denmark. Due in large part to the weak economic performances of its main trading partners--the Nordic countries, Germany, and the United States--Denmark's economy is projected to expand only about 2 percent in 1992, the same rate as last year. The economy is generally in good shape. Inflation, at 2.6 percent, is the lowest in the OECD, and the trade and balance-of-payments surpluses of the past two years are expected to continue this year. Unemployment, however, was 10.6 percent in 1991, and is expected to remain high in 1992.
U.S. exports 1991--$1.6 billion U.S. imports 1991--$1.7 billion
As the only Nordic member of the European Community, Denmark will play a key role in the anticipated integration of Sweden and Finland into the EC. The US&FCS at the U.S. Embassy in Copenhagen encourages U.S. firms to consider Denmark as an excellent entry market to the EC. Best prospects for U.S. exports are for such high-tech goods and services as computers, peripherals, and software; telecommunications equipment; aircraft and parts; and oil and gas field machinery. Finland. Finland is suffering through its worst recession since World War II. GDP declined 6 percent in 1991, and flat or negative growth is projected for 1992. Factors in the decline include weaknesses in the economies of its trading partners and an abrupt end to the trade agreement with the Soviet Union, which had been a major market for Finnish ships and machinery. Unemployment has risen to 9.8 percent and is expected to peak at 10 to 11 percent later this year. Finland's current-account deficit, however, is expected to fall this year, as exports grow moderately and imports drop.
U.S. exports 1991--$951 million U.S. imports 1991--$1.1 billion
Finland applied for membership in the European Community in March, a step which should lead to expansion of its trade with West European countries.
In spite of the recession, high-quality U.S. goods will continue to find a market in Finland--particularly computers, software and services, electronic components, laboratory and scientific instruments, and pollution control equipment.
Iceland. The recent cancellation of plans to build a new aluminum plant in Iceland has reduced hopes that the country can climb out of its five-year recession. GDP is expected to fall about 3.5 percent this year, as world markets for aluminum, ferrosilicon, and farmed fish remain poor. The trade deficit is also likely to grow. Inflation in 1992 is forecast at a low 5 percent, but unemployment may reach 2.6 percent--a high rate by Icelandic standards.
U.S. exports 1991--$156 million U.S. imports 1991--$208 million
Prospects for sales of some U.S. products are good. Most goods in Iceland are imported, and American brands are well regarded. U.S. exporters of telecommunications products and services will benefit from a planned privatization of this sector. Automobile parts and accessories are needed, as Icelanders are keeping their cars longer. Consumer goods such as foods, housewares, sporting goods, and toys are also in demand.
Source: International Trade Administration, Business America Magazine