A positive glimmer in technology industry orders — but weak demand thwarts the longed-for turnaround
A cruise ship order and several other high-value orders have stimulated order intakes in the technology industry, but demand has remained weak. The number of employees saw a greater decrease in October–December than ever before during this long downturn. The number of people laid off was at its highest level since the coronavirus crisis.
The latest order book and personnel survey by Technology Industries of Finland indicates that there is no reason to expect the long-awaited and hoped for turnaround in exports to materialise, even though order intakes grew substantially in October–December 2024.
The monetary value of new orders – which had been on the decline for several quarters in a row – was 48 per cent higher in the October–December period than in the previous quarter, and 22 per cent higher year-on-year. This dramatic increase is primarily thanks to a single extremely valuable cruise ship order during the review period and several other individual high-value orders.
“The growth in the value of orders is great news, without a doubt. At the same time, it’s concerning that there are no signs of a broader recovery in market demand, which would usually precede a pickup in order inflows. These new orders are the first indications that we’re closer to a turnaround, but there’s no reason to celebrate yet,” says Petteri Rautaporras, Director, Chief Economist.
The latest balance figure for tender requests in the industry, which was -7 based on the data collected in January, also indicates that the economic situation remains weak. The balance figure for tender requests in the technology industry has now remained negative for ten consecutive quarters.
Uncertainties in the export market are increased by the unpredictability of global politics, the budding trade war, and a lack of clarity about tariffs. The situation looks even more bleak due to the difficulties faced by Germany and France as well as the prolonged problems of European industry. Employment has declined, new order intakes have decreased, order backlogs have contracted and production has gone down.
“We can only declare that we’re in an upswing once the export markets have clearly begun to recover, companies have become more confident as measured by various barometers, and order flows remain on a growth track. We hope that the spring will bring with it signs of a turn for the better,” says Rautaporras.
Now it’s time to make big decisions instead of focusing on trivialities
The weak demand that has plagued industry for a record length of time is now also reflected in the technology industry’s personnel figures. The number of employees in the industry decreased more than ever before during the current downturn. The percentage of those who were temporarily laid off in the fourth quarter increased to a record high, while the number of new hires was at its lowest ebb during the entire economic cycle.
The number of personnel decreased by 2,500 people since the end of September. Around 23,000 employees were temporarily laid off at the end of December.
The Finnish economy has not grown in 17 years. Public-sector indebtedness has accelerated, our cost competitiveness has not improved, and the economic growth has been weak even as the economies of many competing countries are continuing to grow. At the same time geopolitical uncertainty has increased substantially.
“Also Finland is facing an entirely new situation, which calls for a new, bolder approach to thinking and decision-making. When the government meets in the spring to seek new ways to accelerate economic growth, the answers will not be found in trivial details, nor should justifications for blocking reforms be based on looking in the rearview mirror,” says CEO Minna Helle.
The well-being of Finns is based on the ability of companies to create and sell new products and services with high added value, globally. In addition, both Finnish and international companies need to invest more in Finland in the future. To this end, we need a strong level of expertise and higher education, world-class research and innovation, support for the commercialisation of ideas and a competitive investment environment.
“Savings alone don’t generate growth and well-being. The focus of RDI activities must be on business-driven initiatives, impact, and economic growth. We need to enhance our attractiveness as a destination for investments and work-driven immigration, and we must have the courage to reform taxation as a whole. These are good starting points,” Helle states.
Read more:
Further information
Rautaporras Petteri
Director, Chief Economist Technology Industries of Finland