Difficult situation in Finnish tech industry continues

Industrial companies in Europe and Finland have continued to face an extremely difficult situation, according to survey commissioned by Technology Industries of Finland.

In the Finnish technology industry, turnover in January-April was down 8 per cent on the corresponding period of 2023, said a press release on Thursday.

New order intake in Europe and the latest data on the trend in demand and the order intakes of companies in the Finnish technology industry indicate that there are as yet no clear signs of the anticipated turn for the better.

“There has been no further significant weakening. We can thus take the optimistic view that the business cycle is now at its lowest ebb and that it will already pick up slowly in the winter. However, there are indications that the road to recovery may be rockier than we hoped in the spring,” said Petteri Rautaporras, Director and Chief Economist of Technology Industries of Finland.

Finnish industry and technology industry have had a difficult year behind them.

According to the latest order book and personnel survey by Technology Industries of Finland, the value of new orders in April-June was down one per cent on the previous quarter and 15 per cent year-on-year.

At the end of June, the total value of order books was 3 per cent lower than at the end of March and 12 per cent lower than in the corresponding period of the previous year.

The value of order books in the technology industry has now declined for five consecutive quarters.

The balance figure for tender requests was minus 15 in June, and total demand has remained weak.

However, in April-June, the differences between companies in the industry were quite big.

Some companies have seen at least a momentary recovery in order intake, while the intake of other companies remained very low. Despite the very difficult situation, companies have remained confident that the situation will gradually ease up.

“The first interest rate cut has been made and we are waiting for the next. However, due to the sluggish turnaround in the economy, companies would we well advised to prepare themselves to face quite a long period of weak demand,” said Rautaporras.

In mechanical engineering, which is the largest technology industry sector, the value of new orders decreased by 7 per cent in the April-June period from the previous quarter.

Year-on-year, the value of new orders fell by as much as 26 per cent.

Industry has had a tough year, as is evident from a downswing in the number of personnel employed by technology companies, although no dramatic turn for the worse has as yet occurred.

At the end of June, the industry had 335,000 employees in Finland. Compared to the end of March, the number of employees was down by about 1,000.

According to the personnel survey, the number of employees affected by lay-off procedures at the end of June was about 13,000.

New recruitments during the spring and early summer were moderate, with a total of 9,500 hires.

The number of summer jobs at technology companies has been quite normal in spite of the difficult economic situation. Based on the personnel survey, around 18,000 people worked in summer jobs in the technology industry.

“The employment situation has weakened and, despite the government’s growth measures, the public sector continues to incur even more debt. It is reassuring that proposed investments in Finland amount to over EUR 250 billion. We all need to work hard to ensure that most of these projects will be carried out,” said CEO Jaakko Hirvola.