Technology industries, Finland’s largest export sector, expect demand to recover in the latter part of this year. The value of new orders and order books has strengthened slightly compared to the previous quarter, and demand has not weakened despite U.S. tariffs. In addition, employment in the sector has remained stable since the beginning of the year.
Petteri Rautaporras, Head of the Economy and Sustainable Growth Unit and Chief Economist at Technology Industries of Finland, notes that there are still no clear signs of a cyclical turnaround, but maintaining orders at a reasonable level in the second quarter is a clear defensive victory.
“A positive sign is that the huge uncertainty in the spring did not materialize as a freeze in demand,” says Rautaporras.
The situation for new orders and order books remains rather weak, but the good news is that the threat of a trade war has not pushed the economy toward a downturn. In April–June, the value of new orders was 5 percent higher than in the previous quarter and 15 percent higher than during the same period last year. In the machinery and metal industry, the value of new orders in April–June was 1 percent higher than in the previous quarter. Compared to a year ago, the value of orders increased by 13 percent.
The balance figure for the request-for-quotations survey was +7 in July. This is the same figure as in the spring, when it turned positive for the first time in over two years. The positive figure indicates that market activity has remained fairly brisk despite uncertainties. The situation may improve further towards the end of the year. According to Rautaporras, the conditions are now favorable, so a cyclical turnaround could happen quickly.
“With the financing environment in Europe now more favorable than it has been for a long time, the conditions for moving forward with new investments have improved, and companies are expected to launch projects that have been on hold,” Rautaporras says.
Economic Policy Must Remain Stable
The tariff agreement has a negative effect on Finnish technology industries, but the impact is expected to remain relatively moderate.
“Despite all the uncertainty, the message from companies has consistently been more positive than pessimistic. This positive outlook is based on the fact that there has consistently been activity and interest in the markets. Only the decisions are missing,” says Rautaporras.
Technology Industries of Finland is calling on policymakers to take action to increase Finland’s attractiveness as an investment destination. CEO Minna Helle states that companies are key to growth, which is why decision-makers must create incentives for innovation and growth. She warns that new taxes and regulations would now weaken competitiveness.
In the summer, the European Commission announced new state aid frameworks that solidify state aid competition between member states. Finnish companies developing cutting-edge technology have to compete in the market with companies that receive substantial national subsidies in Europe, as well as in China and the United States. Global state aid competition and tariff policies create a very unhealthy competitive environment for Finnish companies.
Finnish export industries are also driven and challenged by the EU’s 2040 climate target, China’s rise as a leader in green energy, and the global battle for raw materials. Companies in the technology industries can provide solutions to global climate and environmental challenges and turn them into new business opportunities.
Pictured: Petteri Rautaporras, Head of the Economy and Sustainable Growth Unit and Chief Economist at Technology Industries of Finland. Photo: Liisa Takala, Technology Industries of Finland