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Economic Outlook 1/2026

2026 began in a climate of unprecedented uncertainty. There has as yet been no significant turnaround in the general economic situation. In spite of the exceptional trade and geopolitical volatility, order books and new orders in the technology industry strengthened significantly in the last quarter of 2025, driven especially by the shipbuilding and defence industries.

Published 13.2.2026

Global and Finnish Economic Outlook

Order intakes grow in the technology industry, driven by shipyards – record-high uncertainty clouds the outlook for the future

The International Monetary Fund IMF’s latest economic outlook states that global economic growth will remain at 3.3 per cent this year and 3.2 per cent the next. The forecasts for 2026 and 2027 have remained practically unchanged since the outlook released over a year ago in October 2024. The global economy has thus shown considerable resilience, considering the trade policy developments and geopolitical uncertainty seen in 2025. Adaptation has been facilitated by factors such as the agility of companies, more accommodative financial conditions and the fact that the worst trade tensions did not materialise.

The IMF’s forecasts about inflation remain unchanged. Globally, inflation is projected to decline from 4.1 per cent to 3.8 per cent in 2026. Inflation of 1.9 per cent is forecast for the eurozone and 2.5 per cent for the United States. In the US, inflation is expected to fall at a slower rate than in other countries.

It is important to keep in mind that the IMF’s forecast was drafted at the end of 2025, based on the assumption that business as usual would prevail in trade policy. However, US President Donald Trump issued many tariff threats in January. If implemented, these tariffs would have a downward impact on the forecast figures.

European industry is still mired in zero growth – but there are signs of optimism

The Purchasing Managers’ Index (PMI) for all sectors in the eurozone has remained on an upward trajectory. That said, the rate of growth was slower at the turn of the year than it had been in the autumn. The PMI has now been above the 50-point growth threshold for 13 consecutive months. This suggests that the economy has continued to recover, but growth remains subdued.

When we look at the service and industrial sectors of the eurozone separately, we can see that growth continued in services, while industry is languishing at around zero growth. The state of industry in the eurozone is critically important for the Finnish technology industry, as two-thirds of its exports go to Europe. From Finland’s perspective, eurozone industry thus remains unfortunately sluggish.

However, there are significantly stronger expectations for growth this year, and industrial confidence was riding higher than in almost four years. This trend has been driven by higher confidence in both Germany and France.

Another bit of positive news is that the economic forecasts for Germany, a major export country for Finland, have been revised slightly upwards, with economic growth of 1.1 per cent expected this year. That said, in late 2025, the rising figures in the German metal and electronics industry were still largely coupled to growth in the defence sector. Recovery in other sectors has been modest so far.

The PMIs indicate that economic growth continued in the United States at the beginning of the year, but at a slower pace than in the autumn. Expectations of future economic growth were dampened by concerns about the political environment and higher prices. In industry, price pressures have intensified, especially due to tariffs. In the service sector, the growth rate has remained unchanged, while growth in industrial output has picked up.

The optimism expressed in the autumn did not materialise in the manufacturing industry

According to the latest Business Tendency Survey by the Confederation of Finnish Industries, the situation in the manufacturing industry remained somewhat sluggish at the turn of the year. The upbeat business cycle expectations published in the Business Tendency Survey in October had not as yet materialised by the beginning of the year. The current economic situation is evaluated as being weak (-31) and expectations concerning the trend in coming months are only slightly optimistic (+8).

The TeknoBaro survey published in December expressed a more positive outlook, anticipating stronger order books and new orders. According to TeknoBaro, the investment intentions of companies started to rise towards the end of 2025, with many planning to increase their year-on-year investment spend in 2026. If the state of the world and uncertainty do not undermine companies’ intentions, a pick-up in investments would yield longed-for visibility concerning future growth.

Order intakes are very strong compared to the general economic situation

New orders in the technology industry strengthened significantly in the last quarter of 2025. The high order intake is due to a cruise ship order recognised during the quarter. The exact value of this order has not been disclosed to the public, but a look at the export statistics of Finnish Customs for November 2023 and June 2025, when ships of a similar size were delivered to customers, yields some insight into the matter. At that time, the export statistics showed a one-time increase of almost two billion euros in ship exports.

Even if this cruise ship order is eliminated from the figures, technology companies saw a welcome broad-scale increase in new orders. Demand appears to have picked up across the board. Large individual orders gradually create demand in large-scale subcontracting networks and improve the outlook for SMEs.

At the same time, PMIs in major export markets have not as yet shown vigorous growth, and according to the Business Tendency Survey, sentiment in the Finnish manufacturing industry remains very cautious.

The balance figure for tender requests in the Finnish technology industry was +6 in January, which reflects a slight pick-up in demand without indicating a significant improvement in the economic cycle.

The larger order flows are not as yet evident in the employment figures for the technology industry as a whole, and the number of personnel fell in the last quarter. However, when examined by industry, it is evident that there has been a cautious turnaround to growth in manufacturing, especially in the mechanical engineering industry, with the number of employees being slightly higher in 2025 than in 2024. The number of employees is usually the last indicator to start rising when the cyclical situation takes a turn for the better.

Risks are unusually high

Although the global economy has, all things considered, adjusted better than expected to the new business environment and the forecasts for the year ahead are relatively good, there are significant risks that development will fall short of current expectations. Trade policy uncertainty, geopolitical tensions and a new kind of instability in transatlantic relations are not conducive to economic growth.

Uncertainty clouds the outlook and weighs on companies’ expectations for the future. From the perspective of export companies, the worst impacts of trade policy turbulence are in fact this uncertainty and the lack of long-term visibility into the future.

Stronger order intakes and order books are fostering greater hopes for better development this year. Higher confidence in European industry also gives cause for optimism. However, due to the unprecedented level of uncertainty, one should temper one’s expectations. The economic situation is extremely sensitive and uncertainty is still putting the brakes on investment decisions.

Technology industries in Finland

Growth in the order books of the technology industry, driven by shipyards

According to preliminary estimates, the turnover of technology industry companies in Finland rose by approximately 2.7 per cent in 2025 from 2024. Turnover fell in mechanical engineering and the metals industry. Turnover is growing in the electronics and electrotechnical industry, information technology and consulting engineering. Their turnover in Finland totalled approximately EUR 103 billion in 2025.

The monetary value of new orders in the October–December period was 45 per cent higher than in the previous quarter of the year and 8 per cent higher year-on-year. The surge in order intake is in large part due to a very valuable ship order recognised during this quarter. Order intake was also bolstered by a few other high-value orders. However, the stronger order intake was not due solely to a few individual orders; the results were surprisingly positive in the technology industry on a broader scale during this quarter. At a company level, 61 per cent of companies reported that their order intake had increased compared with the previous quarter.

The balance figure for tender requests in January was +6, virtually on a par with the previous level. The positive balance figure indicates that there is market activity in spite of the uncertainty. However, the balance figure does not indicate that there would have been a sharp increase in demand; rather, the gradual improvement that has been underway for some time appears to have continued.

At the end of December, the value of order books was 12 per cent higher than at the end of September and 19 per cent higher than in December 2024.

Based on order intake in the latter half of 2025, the turnover of technology companies is expected to increase this year.

The number of personnel employed by technology industry companies in Finland in 2025 was down 0.9 per cent on average, or 3,000 people, from 2024. On average, the industry employed approximately 330,000 people in 2025. At the end of December 2025, the industry had approximately 329,000 employees. The number of personnel remained fairly stable in 2025, except for the last quarter. In the fourth quarter of 2025, the total number of employees was down 1,700 compared to the previous quarter.

According to the personnel survey by Technology Industries of Finland, the number of employees affected by temporary lay-off procedures at the end of December was approximately 10,300. The number of temporary lay-offs increased slightly in the last quarter, but in spite of this, the number of those laid off temporarily is moderate compared to early 2025.

Compared to earlier years, recruitment of new employees remained at a low level in the October–December period. In total, recruitments came to only 5,500. Some companies were increasing their payroll, while others were hiring new employees due to retirements and employee turnover.

Information based on the situation on 4 February 2026.
Next Economic Outlook will be published 6th May 2026 at 10.00 am.

Contacts:

Economy and Sustainable Growth

Mikkonen Hanne

Senior Economist – Economic Development and Investment Technology Industries of Finland

+358 440296152 hanne.mikkonen@teknologiateollisuus.fi