Technology industries report excellent order intake
The monetary value of new orders in the October-December period was as much as 40 per cent higher than in the third quarter and as much as 4 per cent higher year-on-year. The quick rise of producer prices also contributed to the increase in the value of order intake.
This information is based on the recent order book and personnel survey published by Technology Industries of Finland.
“Strong order intake is excellent news. The number of tender requests received by companies has also remained at a good level. Another positive trend is that, unlike earlier in the autumn, a significant majority of companies reported that the value of new orders was up,” says Petteri Rautaporras, Director, Chief Economist at Technology Industries of Finland.
At the end of December, the value of order books was 8 per cent higher than at the end of September and 16 per cent higher than in December 2020. Shipyards’ share of the total value of order books remains exceptionally large. Order books are currently inflated also by the delivery problems caused by material and component shortages.
“While the order intake is excellent, the industry also faces significant risks, some of which are quite unpredictable. These include supply chain issues, inflation, fears of wage inflation, central banks’ reactions to the economic development. Geopolitical risks are also exceptionally high at the moment. According to faint signals, supply chain issues may ease somewhat during early 2022, but on the other hand, the situation could also deteriorate rapidly,” Rautaporras points out.
According to preliminary data, the turnover of technology industry companies in Finland amounted to approximately EUR 87 billion in 2021, up more than 6 per cent year-on-year.
Perfect time to promote investment
Jaakko Hirvola, the CEO of Technology Industries of Finland, would like to see the Finnish government act quickly to promote investment activity. The outlook is good for technology industry, which is the biggest export sector in Finland, so this is a perfect opportunity to boost growth, green transition, and digitalisation by investment.
According to Hirvola, while discussing spending limits, the government must make decisions on issues including the R&D tax incentive and legislation on the financing of R&D proposed by the parliamentary working group on RDI. It is important to make the R&D tax incentive available from the start of 2023. The legislation needs to enter into force during this government term as it will encourage decision-makers to honour the political commitment to raise R&D spending to 4 per cent of GDP over the coming years. A large number of technology industry companies have already committed to increasing their level of investment if the recommendations of the parliamentary working group are implemented.
“I am very concerned over the level of public RDI funding. If nothing is done, the funding will contract by as much as several hundreds of millions of euros next year. This is because temporary measures, such as additions by the government and the EU stimulus package, are coming to an end,” Hirvola says.
“It is also important to remember tangible investments. At the very least, we should make sure that ongoing initiatives can be processed and approved quickly. To make Finland more attractive for foreign investors and international expertise, the government must resist the temptation to introduce higher taxes on businesses, entrepreneurs, capital, and personal income. At the same time, they should not cut any funding for research and education.”
Electronic identification can speed up immigration for skilled labour
According to Minna Helle, Deputy CEO of Technology Industries of Finland, this is the last chance for the current government to make decisions on employment to bolster public finances.
“It is often said that tough decisions should be avoided during hard economic times. However, skills shortages are a harsh reality, and there are plenty of vacancies. People have good chances of finding employment. This is a great opportunity to renew the unemployment benefit system to encourage taking up employment,” Helle says.
According to Helle, skills shortages are already a serious threat to growth, and we need to make much more of an effort to attract international expertise. It may be that the gravity of the situation has not yet been fully understood in Finland. We need to adjust our thinking: recruiting individual foreign experts will not be enough to ease the shortage.
“Electronic identification could be used to significantly speed up immigration for skilled labour, shortening waiting times from one year to just one week. We should not miss this opportunity,” 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