Positive momentum continues in technology industry – order intake reaches pre-pandemic levels
This information is based on the recent order book and personnel survey published by Technology Industries of Finland.
“Technology industry has recovered well from the impact of the pandemic, although the order intake is only now returning to its pre-pandemic levels. As before, there are significant differences between individual companies, which means that the outlook has not improved for all of them,” says Petteri Rautaporras, Director, Chief Economist at Technology Industries of Finland.
According to Rautaporras, their current pandemic-related problems are mostly related to component shortages and rising material prices. The pandemic is not over yet, and despite expanding vaccination coverage, is a cause of general uncertainty.
The monetary value of new technology industry orders in the April-June period was 6 per cent higher than in the first quarter of the year and as much as 21 per cent higher year-on-year. Strong demand is also reflected in the number of requests for tender. Their balance figure for July was +30, which is very close to a record level.
At the end of June, the value of order books was 5 per cent higher than at the end of March and 9 per cent higher than in June 2020.
The number of personnel employed by technology industry companies in Finland also increased further in the second quarter. At the end of June, the industry employed approximately 317,000 people in Finland, up 3,000 from the first quarter. The industry provided around 16,000 summer jobs in 2021.
Growth spurt not enough to solve long-term challenges
The CEO of Technology Industries of Finland Jaakko Hirvola is happy to see that the technology industry has fared better than expected during the pandemic. Finland has kept up well with global growth, but we cannot yet talk about overperformance. Only after the corona turmoil will the real competitiveness of companies in the international market be tested.
“However, this growth spurt has not done away with the old challenges of Finnish economy. According to forecasts, Finland is likely to return to slow growth after the recovery from the effects of the pandemic. While the situation is good right now, we must stay focused and avoid the illusion that problems can solve themselves. There are also large differences between companies, which emphasizes the need for local agreement and company-specific solutions,” Hirvola points out.
According to Hirvola, the budget negotiations that will take place in the autumn will need to make decisions on issues such as renewal of the unemployment benefit, facilitation of work-based immigration as well as removal of barriers to local agreement.
“Finland needs expertise to succeed. High level of education and digital skills have helped us also during the pandemic. For example, increased level of RDI funding is a widely accepted idea in Finland, so now is the time to act. Similarly, the current R&D tax incentive should be expanded. Widely used worldwide, it is an effective way to boost companies’ research activity. These decisions are necessary so that Finland can play to its strengths and unlock the full potential of green transition and digitalisation,” Hirvola points out.
Deputy CEO of Technology Industries of Finland Minna Helle points out that the labour market plays a central role in economic growth.
“It has taken Finland a long time to catch up with the others in terms of cost competitiveness after the financial crisis. We must remain vigilant in this respect in the coming years. The biggest mistakes in terms of Finland’s cost competitiveness have typically been made when the situation has looked particularly rosy,” Helle concludes.
Jaakko Hirvola, CEO, phone +358 40 063 3751
Minna Helle, Deputy CEO, phone +358 50 341 4884
Petteri Rautaporras, Director, Chief Economist, phone +358 50 304 2220