Documentation of statistics forestry as an investment

Data description

The statistics present investment returns on wood production in non-industrial private forests per factor and region starting from 1990. Using calculations, it is possible to compare annual investment returns on wood production per factor in different parts of Finland. The value of capital (stumpage price of growing stock) is calculated on the basis of average prices of standing sales during the calendar year.

Classification system

The information is provided by region. In 1990–2014 the regions include the regional districts of the Finnish Forest Centre (13) and the Province of Aland. Since 2012 the regions are the counties of Finland (19).

Sector coverage

The statistics are based on other statistics, the coverage of which is over 90%.

Statistical concepts and definitions

Non-industrial private forests include ordinary non-industrial private forest owners (natural persons, estates of deceased persons, and enterprises), as well as jointly owned forests and forests owned by municipalities, parishes, foundations and other similar communities or enterprises outside the forest industry.  Until 2008, non-industrial private forests also included those state-owned forests that were not managed by Metsähallitus.

Standing sales price is the stumpage price paid for wood to owners of non-industrial private forests in standing sales (EUR per m³).

Stumpage price value is calculated by multiplying the assortment-specific volumes of forests by their standing sales prices.

Return on investment is a return index, which represents the annual return on investment in percentage.  It is calculated as a natural logarithm conversion relative to received income, operating expenses, changes in the value of assets, and capital. Nominal returns are calculated using prices valid in the year in question. Returns in real terms are calculated using prices converted to the value valid during the last year of the time series using the cost-of-living index.

Regions are the counties of Finland starting from 2012, and between 1990 and 2011 were the 13 districts of public services of the Finnish Forest Centre and the Province of Aland.

Factors of investment returns on wood production

Income from roundwood sales represents the impact of returns on wood sales from non-industrial private forests in cash and the value of roundwood harvested for private use on return on investment.

Total costs in wood production are based on costs of silviculture and forest improvement in non-industrial private forests recorded in statistics and primarily on estimates of administrative and other similar costs. Total costs of wood production always comprise a negative factor in terms of returns.

State subsidies represent the impact of subsidies obtained by owners of non-industrial private forests for silviculture and forest improvement on return on investment.

Value of net increment represents the impact of changes in the value of forest assets resulting from changes in the growing stock and assortment structure on return on investment.  This factor is affected by the development of assortment volumes of growing stock during the year, not by changes in stumpage prices during the year. If the value of felled trees is higher than the value of trees grown in their place, this factor will be negative.

Stumpage prices change represents the impact of changes in the value of growing stock resulting from changes in stumpage prices during the calculation year on return on investment.  There may be significant variation between different years, and these changes can have a significant impact on total returns, also in a negative direction.

Statistical unit

The following statistics published by the Natural Resources Institute Finland are used as sources of information:

Income: Volume and prices in industrial roundwood trade, Commercial fellings, Wood consumption, and Total roundwood removals and drain.

Expenses: Operating profit in non-industrial private forestry

Annual changes in volumes of growing stock are based on Luke’s National Forest Inventory results, industrial roundwood removals and the volume of wood harvested by owners of non-industrial private forests for private use. In the calculation of stumpage price values, volumes of growing stock are based on the assortment-specific volumes in forest land for wood production in accordance with the National Forest Inventory.

Statistical population

The statistics only use data from other statistics.

Unit of measure

Results are given in percentages.

Reference period

Calendar year

Reference area

Until 2011, Mainland Finland by regional districts of the Finnish Forest Centre. Since 2012, by counties of Finland.

Time coverage

Information is available starting from year 1990.

Frequency of disseminations

Both provisional and final information is published yearly.

Base period

The statistics are not an index.

The statistics are compiled based on the Act on the Natural Resources Institute Finland (561/2014), the act on food and natural resource statistics (562/2014) and the Statistics Act (280/2004).

More information: Statistics legislation

Confidentiality is a base principle of statistics and assures the confidential processing of data provided by informants, and the Natural Resources Institute Finland has undertaken to follow this principle.

More information: Privacy policy – Statistics

The disseminations of the Natural Resources Institute Finland are published online on weekdays at 9:00.  Data is public after it has been published on the website.

Publication calendar

The publication dates are confirmed in autumn together with the action plans. The release calendar of the following year is published for users in the end of the year. The release calendar holds data on the dates of future publications. The calendar also contains direct links to already published statistical publication.

Access to the publication calendar

Statistical releases calendar | Natural Resources Institute Finland

Quality assurance

The Natural Resources Institute Finland follows the Code of Practice and the Quality Assurance Framework of European statistics when compiling statistics. The Code of Practice concern the independence and accountability of statistics authorities, and the quality of processes and published data. The principles are compatible with and supplement the Principles of Official Statistics, agreed upon by the United Nations Statistical Commission. The quality criteria of official statistics in Finland are also compatible with the Code of Practice of European statistics. The principles are also compatible with the European Foundation for Quality Management.

Quality assurance on the statistics was performed in the spring of 2020.

Quality assessment

The quality of the statistics matches the quality of statistics used as data sources.

User needs

The statistics are used, for example, as key figures in the Finnish budget, as an indicator in the National Forest Strategy, in the preparation and monitoring of national and regional forest programmes, and as background material for decision-making related to investments in forestry at financial institutions, among others.

User satisfaction

Feedback is collected from the users of the statistics, especially when revising the statistics. Feedback is also received directly. In addition, we investigated the wishes of users for developing the statistics in the autumn of 2021 and beginning of 2022, when updating the work programme for the Natural Resources Institute Finland. We follow the received feedback and take it into consideration in developing the statistics.

Overall accuracy and reliability

The accuracy and reliability of the statistics are presented in the quality descriptions available from the homepage for each statistic.

The value of forest assets is defined as the value of stumpage prices, which is a simple and coarse way to define the value of forest assets. In 2020, the value of stumpage prices in non-industrial private forests (EUR 3,510 per hectare, forest land and poorly productive forest land for wood production) was 30 per cent higher in Mainland Finland than the average of sales prices of forest properties (EUR 2,692 per hectare) recorded in statistics by the National Land Survey of Finland. Between counties, values of hectare-specific stumpage prices differed from sales prices by -21 per cent (Uusimaa) up to +30 per cent (North Ostrobothnia). Forest properties made available for sale usually have fewer trees than forests in the same area on average.

As the formulas used to calculate different return factors are not exact, the total returns calculated based on these factors differ from directly calculated total returns. Between 2012 and 2020, the difference in Mainland Finland was -0.04 to -0.00 percentage points, while the corresponding range in county-specific results was -0.12 to +0.15 percentage points.

Data collected is always compared to the numbers of the previous year. This is done to try to prevent the collection of faulty data.

Sampling error

Data is not collected for the statistics.

Timeliness

Preliminary data is published during March of the year following the statistical year, and final data is published in September or October. Release schedule is determined by the release date of the statistics used as data sources.

Punctuality

The statistics have usually been published according to the publishing date declared in advance. Delays in publications have been caused by delays in the publishing of statistics used as data sources.

Comparability - geographical

The statistics are geographically comparable.

Comparability - over time

In the “Forestry as an investment” statistics, returns are calculated similarly for all regions and years. Due to corrections made to tree volumes, returns between 1990 and 2003 are not comparable with data published before 24th November 2021.

The returns found in the database were corrected on 24th November 2021. The figures for forest centres have changed between 1990 and 2003. In the 8th National Forest Inventory (NFI8), the proportions of logs were greater than in the 9th Inventory (NFI9). This difference was due to a different way of calculating the division of the tree stem into log wood and pulpwood. This decreased investment returns at the national level especially between 1994 and 2000 due to deterioration in the value of forest assets calculated on the basis of timber and stumpage prices between inventories. In the new calculations, the growing stock is interpolated from the 1983 baseline directly to NFI9.  In the statistical database, the time series begins in 1990.

Coherence - cross domain

No comparable statistics are published.

Coherence - internal

The data in the statistics is coherent. The statistics are the only regularly recorded statistics regarding the returns of wood production. 

Source data

The following statistics published by the Natural Resources Institute Finland are used as sources of information:

Income: Volume and prices in industrial roundwood trade, Commercial fellings, Wood consumption, and Total roundwood removals and drain.

Expenses: Operating profit in non-industrial private forestry

Annual changes in volumes of growing stock are based on Luke’s National Forest Inventory results, industrial roundwood removals and the volume of wood harvested by owners of non-industrial private forests for private use. In the calculation of stumpage price values, volumes of growing stock are based on the assortment-specific volumes in forest land for wood production in accordance with the National Forest Inventory.

Frequency of data collection

No data collection.

Data validation

Results are compared to results from previous years.

Data compilation

Investment returns in wood production comprise a return index calculated as per components on investment returns. Returns are calculated as a natural logarithm conversion relative to factors and capital. Capital is calculated by multiplying the assortment-specific volume of growing stock by standing sales prices.

In the calculation of the Total investment return and Stumpage prices change components, the value of stumpage price value is calculated on the basis of the previous year’s growing stock volumes and stumpage prices. The Value of net increment and the Income from roundwood sales components are calculated using the previous year’s growing stock volumes and the value of stumpage prices calculated on the basis of the calculation year’s stumpage prices as the divisor, while the Costs in wood production and State subsidy components are calculated using the value of stumpage prices calculated on the basis of the calculation year’s tree volumes and stumpage prices as the divisor.

The return calculation is presented in the publication of Markku Penttinen and Andrei Lausti (Penttinen, M. & Lausti, A. 2004. The competitiveness and return components of NIPF ownership in Finland. The Finnish Journal of Business Economics 53(2): 135, 143–156). 

Returns are calculated using nominal and real monetary values.  Changes in the monetary value are made using the cost-of-living index (1951=100).

The calculation of the annual volume of growing stock is based on the assortment-specific volumes of roundwood in forest land for wood production registered in the National Forest Inventory (NFI), and felling volumes are based on industrial roundwood removals and the volume of trees harvested by owners of non-industrial private forests for private use. In calculations for the regions of the Finnish Forest Centre (1990–2011), the starting point is 1983, based on NFI7. Its information has been adjusted using multipliers calculated on the basis of changes in NFI9 (timber assortment, forest land for wood production and forests of non-forestry enterprises). Interpolation from NFI9 has been directly carried out from NFI11.

Starting from NFI10, results have been published as averages from five measuring years. In regional calculations 2012–2016, tree volumes between NFIs are interpolated between the centremost years of measuring periods (e.g. NFI11 – NFI12, 2011–2015), and information about later years are extrapolated using the multipliers obtained from the aforementioned interpolation. In annual NFI updates, the centremost year of the measuring period moves, and the multipliers obtained from interpolation change, until the next five-year NFI is completed. Starting from 2017, data for the centremost year of the five-year inventory period based on the results of annually published National Forest Inventories (NFI). Tree growth is calculated based on the average of assortment-specific growth over the past five years. The three last years of the time series are preliminary data.

Felling volumes include wood felled for industrial uses and exports, wood used for subcontracting, and fuel wood consumed in small-scale housing. It is estimated that 30 per cent of fuel wood fulfils the dimensions defined for pulpwood.

Returns on wood production are calculated by multiplying assortment-specific felling volumes by the regional annual averages of their standing sales prices. Total costs of wood production are based on the statistics of operating profit in non-industrial private forestry.