Home » Economic Outlook and Statistics » Economic Outlook

Economic Outlook 3/2026

The economic situation in the technology industry continued to improve during the spring and early summer, as new order intakes grew and order books strengthened. Higher demand is also becoming gradually evident in the number of employees in the manufacturing industry. In spite of trade and geopolitical instability, the global economy has weathered the crises better than feared. That said, the volatile global situation continues to pose risks.

Published 12.8.2026

Global and Finnish Economic Outlook

Order intakes on the rise in the technology industry – the volatile global situation has not dampened the economic upturn

Once again, the global economy has shown itself to be more resilient than expected in the face of turbulence. The war in Iran, which began in February, has cast a shadow over the present year. However, the International Monetary Fund (IMF) forecasts that global economic growth will hold at three per cent this year, even though the Strait of Hormuz is still closed and the Iran war remains unresolved. 

According to the IMF, economic growth in the first months of the year outpaced expectations. The impact of rising oil prices on households was not as strong as expected. The IMF states that the reasons for this include energy-efficiency and the growing share accounted for by renewable energy. Today, less energy is required to produce the same amount of value added than just a few years ago. Economies have thus proven to be more resilient than expected to higher oil prices.

The rise in oil prices caused by the Iran war has fuelled inflation. For this reason, the European Central Bank raised its key interest rate in June, but kept rates unchanged in July. According to the ECB, it is expected that inflation will be high in the short term, while long-term expectations are close to the ECB’s inflation target of two per cent.

Although the global economy has outperformed projections in recent months, both the ECB and IMF emphasise that there is still a risk that the trend could weaken. The full impacts of the energy shock unleashed by the Iran war may not have been felt yet. In addition, trade and geopolitical uncertainty introduce unpredictability into the economy.

The markets expect the ECB to raise interest rates again this year. The IMF forecasts that economic growth in the eurozone will be only around one per cent both this year and the next. The risk involved in hiking interest rates is that it could put the brakes on investment and further dampen the already muted economic growth.

PMIs indicate growth in both Europe and the United States

Based on the Purchasing Managers’ Indices (PMIs) the eurozone returned to a growth track over the summer. After the outbreak of the Iran war, the index reflecting the eurozone business sector as a whole fell to a level that indicates an impending economic contraction. This was largely due to the rapid reaction of the service sectors to the situation in the Middle East. Over the summer, however, the index rebounded to over 50 points, indicating growth.

In July, confidence among companies in the eurozone was at its highest since the Iran war began, albeit below pre-crisis levels.

Another positive development is that the PMI data indicate that cost pressures relaxed slightly in the eurozone during the summer. If this trend holds, it will ease the pressure on the European Central Bank to raise interest rates in the eurozone.

Based on the PMIs, Germany, a key export market for Finland, is back on the road to recovery following a weak spring. On a positive note for Finnish exports, growth focused particularly on Germany’s manufacturing sector and its export orders.

The PMIs also indicate that the U.S. economy picked up over the summer. Stronger growth in the U.S. was seen especially in the service sector, while industrial growth slackened. Confidence in the future improved throughout all U.S. business sectors as expectations strengthened, particularly in services. The outlook for industry is clouded by geopolitical uncertainty, tariffs and rising prices.

On the whole, based on the PMIs, the impact of the Iran crisis has thus far been less severe than feared in both the eurozone and the United States. This is important for Finland’s export-dependent technology industry. However, one must keep in mind that the turbulence in geopolitics and trade policy is not over. The Iran war has been unpredictable recently and could still put the brakes on economic recovery. PMI data for late summer and autumn will show whether the growth we have now seen in Europe will persist in the longer term.

Barometer data point to an improvement in the economic situation of Finnish industry

According to the Confederation of Finnish Industries’ Business Tendency Survey, Finnish companies continued to see an economic turnaround, which gained momentum over the summer. The economic situation in the manufacturing industry is now only slightly below the long-term average. According to the Business Tendency Survey, the economic situation in the technology industry is already slightly better than usual. The business outlook for the months ahead in the manufacturing sector has already soared well into the black.

Insufficient demand continues to pose the biggest obstacle to growth. However, as the economic situation has improved, there has already been a slight increase in labour and capacity shortages.

The results of the June TeknoBaro survey were largely in line with the Business Tendency Survey. TeknoBaro also indicated that demand had continued to pick up in spite of global instability.

New order intakes on the rise

Despite global turmoil, the value of new orders in the technology industry increased in the second quarter of this year. Across the entire technology industry, new order intakes rose by 13 per cent quarter-on-quarter and by 19 per cent year-on-year. The growth in new orders was particularly favourable in the manufacturing sector, that is, mechanical engineering and the electronics and electrotechnical industry. Recent growth drivers have included data centres, the marine industry, the defence sector and electrification, for instance.

Order books also continued to strengthen during the spring. At the end of June, the value of order books was eight per cent greater than at the end of March, up one fifth on the previous year.

The balance figure for tender requests, which indicates overall demand, was +20. The last time the balance figure was this high was in October 2021. The balance figure for tender requests has been growing steadily for over a year, pointing to the gradual improvement of the economic situation and market activity.

Data on production and turnover in the technology industry also indicate that this positive trend has been ongoing for a longer time. In 2025, the turnover of technology industry companies amounted to EUR 104 billion, up 2.8 per cent year-on-year. According to preliminary data released by Statistics Finland, turnover grew in all main sectors of the technology industry during January–April 2026.

Production in mechanical engineering, the largest main sector of the technology industry, has seen fairly steady growth for just over a year now. In January–May of this year, production has risen by six per cent. Order books in mechanical engineering have gained strength since late 2024, driven partly by the marine and defence sectors, and this is reflected in production, turnover and, gradually, in personnel as well.

Exports of goods by the technology industry have also risen during the first months of the year. The value of exports in the January–May period was six per cent higher than during the same period of the previous year. Exports have grown in all main sectors and in all key export markets.

Rising trend in the number of employees in the manufacturing industry

The number of employees in the technology industry saw a slight decline in the second quarter. In the past year, diverging trends have been observed in personnel figures in different sectors: the number of employees has declined in the service sectors of the technology industry, that is, information technology and consulting engineering. At the same time, the number of employees has increased gradually in the manufacturing industry, particularly in mechanical engineering.

At the end of June, mechanical engineering had approximately 138,200 employees. The last time the personnel count was this high was in early 2023 before the weak economic climate of the past few years. It is also the highest number of employees in mechanical engineering since the financial crisis. Despite the downturn in recent years, the employment situation in the manufacturing sector of the technology industry is thus rather good. Stronger order books have gradually led to moderate growth in the number of employees in mechanical engineering as from the beginning of 2025.

Employment statistics for all of Finland have continued to bear bad news. However, employment in industry has gradually started to pick up thanks to stronger order books and growth in production. This bodes well for the outlook for employment in Finland more broadly. One job in industry creates more than one job in other sectors of the domestic market. The improvement in the outlook for employment will gradually have a positive impact on consumer confidence and, ultimately, on private consumption.

Stronger signs of growth, but uncertainty persists

Considered as a whole, all the data sources indicate that the economic recovery continued to gain strength during the spring and early summer. The global economy has weathered the rising energy prices and uncertainty caused by the Iran war better than feared. Industrial PMIs in major export markets have remained positive. Business surveys of Finnish industry indicate a positive trend in demand in both the technology industry and the manufacturing industry more broadly. New order intakes in the technology industry have grown, and order books have continued to strengthen.

There has also been good news about the Finnish economy for the first time in a long while. According to preliminary data from Statistics Finland, Finland’s GDP grew by 0.9 per cent in April–June from the previous quarter, a sharp rise relative to trends in recent years. This was partly due to better demand in the technology industry, investments and the still reasonable employment figures.

Global uncertainty has not cut into the pickup in demand or the economic recovery. Amid the crises of recent years, companies and economies more broadly have proven themselves to be adaptable. Tariffs and new trade policy turbulence did not trigger a recession in the global economy last year. It now seems that the Iran war has not so far caused the expected crisis in the global economy.

However, instability in geopolitical and trade policies continues to pose risks. The continuation of the Iran war, the potential acceleration of inflation, price pressures on a wide front and their impact on key interest rates could put the brakes on demand.

Technology industries in Finland

Order intakes grow and order books strengthen

According to preliminary estimates, the turnover of technology industry companies in Finland rose by 2.8 per cent in 2025 from 2024. Turnover declined in the metals industry but increased in all the other main sectors. Turnover in Finland amounted to approximately EUR 104 billion in 2025.

The monetary value of new orders in the April-June period was 13 per cent higher than in the previous quarter and 19 per cent greater than in the corresponding period of 2025.

At the end of June, the value of order books was eight per cent higher than at the end of March, and 20 per cent higher than in June 2025.

On the basis of order trends in the first months of the year, the turnover of technology industry companies is expected to grow during the present year.

The balance figure for tender requests, which indicates overall demand, continued to rise during the spring and stood at 20 in July. The balance figure has been on the rise for just over a year, and has not been this high since October 2021. The positive balance figure indicates that the markets seem to have continued to pick up in spite of the uncertainty.

The number of personnel employed by technology industry companies in Finland at the end of June was 330,200. This figure is about 0.5 per cent, or 600 people, lower than in March. The technology industry provided approximately 16,000 summer jobs in 2026.

According to the personnel survey by Technology Industries of Finland, the number of employees affected by temporary lay-off procedures at the end of June was approximately 8,900. The number of temporary lay-offs decreased compared to March.

New hires remained almost at the same level in April–June as in the previous quarter, with recruitments totalling 7,600. Some companies were increasing their payroll, while others were hiring new employees due to retirements and employee turnover.

Information based on the situation on 5 August 2026.
Next Economic Outlook will be published 4th November 2026 at 10.00 am.

Contacts:

Economy and Sustainable Growth

Mikkonen Hanne

Senior Economist – Economic Development and Investment Technology Industries of Finland

+358 44 029 6152 hanne.mikkonen@teknologiateollisuus.fi