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Press release

Technology industry employment growth stalled ‒ shipyards’ order books at record level

Tue, 01/28/2020 - 11:58
Weak global demand continues to cast a shadow over the Finnish technology industries. Overall, order books remain strong, but the divergence between individual companies is ever greater and the number of requests for tender continues to fall. The increase in the new orders towards the end of 2019 is almost exclusively attributable to very large ship orders. Employment growth in the industry also stalled at the end of the year.

This information is based on the recent order book and personnel survey published by the Federation of Finnish Technology Industries.

The companies that took part in the survey reported that the monetary value of new orders between October and December was 15 per cent higher than in the preceding quarter and 17 per cent higher than in the corresponding period in 2018. However, the increase in the new orders towards the end of the year is almost exclusively attributable to the shipyards’ large orders. At the same time, differences between individual companies and sectors keep widening, and this trend is likely to continue during the rest of winter.

The number of requests for tender dropped further. A clear majority of companies reported that the number of requests for tender at the end of 2019 was lower than in the preceding quarter. This drop indicates a more subdued development of order books in early 2020.

At the end of 2019, the value of order books was slightly higher than at the end of September and 9 per cent higher that in December 2018. However, it is important to note that some 60 per cent of the strengthening of the order books in the past 6 years is attributable to ship orders. The last ship in the order books is expected to be delivered in 2028.

The average number of personnel employed by technology industries in Finland in 2019 was 319,000, approximately 10,000 more than in 2018. However, employment growth stalled towards the end of the year and even reversed for the first time since 2016. Recruitment activities also decreased notably in the last quarter of 2019. Depending on the company this can be due to a weak outlook or difficulties to find skilled labour force.

“To sum up, the growth of technology industries in Finland seems to have plateaued. Ship orders bolster the figures, but in reality, the outlook is less bright. Differences between companies and industries have widened notably,” says Petteri Rautaporras, Chief Economist at the Federation of Finnish Technology Industries.

Worrying development

According to the CEO of the Federation of Finnish Technology Industries, Jaakko Hirvola, the stalling of employment growth is a very worrying development.

“Naturally, we hope that this drop is only temporary. However, the results of our latest survey indicate that this change may be more permanent in nature. Technology industries employ close to 700,000 people in Finland directly and indirectly, which means that development of employment in the sector has a major impact on the society as a whole,” Hirvola points out.

He also emphasises that the Finnish government needs to act without delay and make important decisions to promote employment and growth. Slower growth and the increase in age-related expenditure are a very difficult equation to resolve. We need direct action; mere tinkering will not be enough.

“The lack of progress in the labour market negotiations is also worrying. Employment and solutions that support cost competitiveness are absolutely crucial. Cost competitiveness is not a dirty word. We need it to bring employment to Finland,” Hirvola emphasises.

Economic Outlook 1/2020

Further information:
Jaakko Hirvola, CEO, phone +358 40 063 3751
Minna Helle, Director, Labour Market, phone +358 40 341 4884
Petteri Rautaporras, Senior Economist, phone +358 40 304 2220