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Economic Outlook 4/2026

Finland’s largest export sector continues to grow and employment is rising. Growth is being driven by major orders from the marine and defence industries. It is possible to achieve growth even in this period of global uncertainty, but the geopolitical and trade policy risks are still riding high.

Published 11.11.2026

Global and Finnish Economic Outlook

The pickup in demand is now reflected in employment figures across the entire technology industry – All key indicators point to growth

The global economy has remained resilient in the midst of global crises. According to the International Monetary Fund IMF, economic growth has outperformed expectations this year in spite of the dragging war in the Middle East and continuing trade tensions. The IMF forecasts global economic growth of 3.1 per cent for this year, even though the situation in Iran remains unresolved and creates market uncertainty.

According to the IMF, two factors explain why economic growth has held up better than expected. Although the availability of oil and gas has weakened and their prices have risen, the energy markets have proven to be resilient. The energy market turbulence caused by the Iran war has been mitigated by rerouting energy shipments, the use of buffers, and the transition to renewable energy and energy-efficient solutions.

Furthermore, the investment boom kicked off by artificial intelligence has accelerated global economic growth and bolstered international trade.

However, the IMF points out that the risks of weaker-than-forecast development remain high. Any new geopolitical shocks or the escalation of hostilities in the Middle East could cause supply disruptions and rapid surges in prices. AI investments have served as a major driver of growth, but they have also led to a concentration of risks because growth is dependent on a narrow group of industries. 

Rising energy prices have accelerated inflation. To curb inflation, the European Central Bank (ECB) raised its key interest rate in June and September 2026. At its most recent meeting in late October, the ECB decided to keep interest rates unchanged. Diesel and petrol prices, in particular, have risen significantly during the autumn. However, core inflation, that is, the trend in prices excluding energy and food, has remained stable. Short-term inflation expectations have mounted, but according to the ECB, the forecast for long-term inflation is close to two per cent.

Like the IMF, the ECB also highlights the risks that trends might fall short of expectations. The most significant underlying factors behind this are the conflict in the Middle East and Russia’s war of aggression in Ukraine. Any disruptions in the energy markets could fuel inflation, and trade policy tensions would be likely to put the brakes on economic growth.

PMIs indicate growth is set to continue, but it may be slowed down by cost pressures

Based on Purchasing Managers’ Indices, which are quite effective at forecasting economic trends, the economies of the eurozone and the United States continued to grow during the autumn. That said, cost pressures are rising at the same time.

The index reflecting the eurozone business sector as a whole has remained around 52 points in recent months, well above the 50-point growth threshold. The pace of growth slackened slightly in October, but remains strong in spite of this slowdown. Growth is dampened by rising inflationary pressures: the prices of production inputs and energy are rising, prompting companies to increase their sales prices.

Companies are optimistic about the future, although their outlook weakened in October compared with early autumn. This decline is driven by political instability and uncertainty in France, where pessimism weighed down companies’ expectations. Elsewhere in the eurozone, expectations for the future remained upbeat.

According to the PMIs, the German economy – a key export market for Finland – has remained on a growth track in recent months. On a positive note, the IMF raised its estimate of Germany’s economic growth in its latest forecast to 1.3 per cent this year.

Economic growth is particularly strong in the United States. The pace of growth is at a five-year high in both the manufacturing and service sectors. Companies’ order books have strengthened and hiring is on the rise. According to PMI data, employment has increased, particularly in industry, and there is great confidence that economic growth will continue.

However, growth is overshadowed by a rise in price pressures on a broad front. Business costs are increasing and sales inflation is picking up the pace in industry. The factors behind the rise in costs include higher oil and energy prices. The prices of many raw materials have also increased. In addition, tariffs and availability issues are driving up costs in the United States.

The key export markets of the Finnish technology industry have thus continued to grow over the autumn. The PMIs for industry are firmly pointing to growth in all key export countries. Based on this, the outlook for continued growth in demand is favourable. However, rising costs cast a shadow over the situation, and may signal accelerating inflation.

Based on survey data, the economic upturn in Finnish industry continues

According to the Confederation of Finnish Industries’ Business Tendency Survey, the outlook for the manufacturing industry continued to improve significantly throughout the autumn. Production is growing, profitability is rising and the number of employees has now also started increasing. Companies state that insufficient demand is still the most common obstacle to growth, but labour and capacity shortages also became more widespread during the early autumn.

Technology Industries of Finland’s TeknoBaro survey in September indicated that the economic situation continued to improve during early autumn, and all indicators pointed strongly to growth.

The survey data thus consistently indicate that growth has continued in the Finnish manufacturing industry.

Large orders from the marine and defence industries boost order books

New orders in the technology industry strengthened significantly in the third quarter of 2026. The high order intake is attributable to cruise ship orders recognised during this quarter. The exact value of this order has not been disclosed to the public, but a look at the export statistics of Finnish Customs for July 2025 and June 2026, when ships of a similar size were delivered to customers, yields some insight into the matter. At that time, the export statistics showed a one-time increase of almost two billion euros per ship delivery.

In addition to the marine industry, the defence industry has seen strong growth recently. Even if we disregard marine and defence industry orders, the third quarter of this year can be described as good. Looking back over the past year, the trend in new order intake is on the rise.

Order books in the technology industry have been gaining strength for nearly two years now. In the third quarter of this year, order books grew by 14 per cent quarter-on-quarter and by a third year-on-year. In other words, the amount of work outstanding at companies is increasing.

The Finnish marine and defence industries have received a great many new orders over the past couple of years, and they thus play a significant role in the growth of order books. The strong performance of these sectors and the large orders they have received are good news for the Finnish economy. These orders generate work for Finnish SMEs across a broad subcontracting chain.  

The balance figure for tender requests, which indicates overall demand, was +15 in October. The balance figure fell slightly from its July peak but currently remains high when considered from a long-term perspective. The balance figure is +15, indicating that the markets seem to be continuing to pick up in spite of global uncertainty.

Production in the technology industry has increased this year, thanks especially to strong growth in mechanical engineering. Production across the entire sector grew by four per cent in January–August compared with the same period last year; in mechanical engineering, growth amounted to seven per cent. Turnover in the technology industry grew by nine per cent in January–July of this year, and turnover is on the rise in all the main sectors. Exports of goods by the technology industry grew by six per cent in January–July.

All key indicators thus point to growth in the Finnish technology industry. Uncertainty and global turbulence are here to stay, for now at least. However, the Finnish technology industry demonstrates that growth is possible even in uncertain times.

Many of the current global trends support demand for technologies in which Finnish technology companies have strong expertise. In addition to the aforementioned marine and defence sectors, investments in data centres and energy solutions are now driving growth in Finland and around the world. The Iran war has sparked off an energy crisis that increases incentives to invest in renewable energy and energy efficiency. The Finnish technology industry’s product portfolio boasts suitable solutions. In its economic forecast, the IMF also highlights the critical importance of diversifying energy sources in order to safeguard societal resilience. This means that, despite the prevailing global uncertainty, there is demand in many sectors for the expertise offered by the Finnish technology industry.

However, the challenges we are likely to face in the near future include growing inflationary pressures and potential interest rate hikes. Interest rates have already risen this year, but this does not appear to have dampened demand so far. The geopolitical and trade policy situation also remains uncertain and could lead to negative shocks.

Number of employees in the technology industry is growing

One sign of the positive trend in the economy is that employment has swung to growth in the technology industry. In the third quarter of this year, the number of employees in the technology industry increased by 0.3 per cent on the previous quarter, which translates to about 900 new jobs.

In practice, the employee headcount in the technology industry declined during 2024, and remained more or less unchanged in 2025. The number of employees has now started to rise, seeing its greatest increase since early 2023. This suggests that the economic situation is continuing to improve: the pickup in demand and stronger order books are gradually driving growth in employment.

That said, trends in personnel growth diverge across different industries. In mechanical engineering, the largest main sector of the technology industry, the number of employees has increased gradually as from the beginning of 2025. In early autumn, growth in this sector seems to have picked up the pace, with the personnel count increasing by 1.4 per cent. The number of employees in mechanical engineering now stands at 140,100, higher than at any time after the financial crisis. Employee counts also grew in the metals industry and consulting engineering. Staff numbers in the electronics and electrotechnical industry have remained practically unchanged. The number of information technology employees continued to decline.

According to the Business Tendency Survey, as many as 19 per cent of companies in the manufacturing sector of the technology industry (mechanical engineering, electronics and electrotechnical, and metals industries) report that a shortage of professionals is limiting their growth. Compared with just over a year ago, when the business cycle was at its lowest ebb, this figure has doubled. This means that if growth continues, the availability of skilled employees could become a challenge for Finnish industry.

Across Finland as a whole, employment growth has still remained subdued during the autumn, and the number of unemployed has risen. Employment growth in the manufacturing sector bodes well for overall employment in Finland. One job in industry indirectly creates more than one job in other sectors of the domestic market.

Number of information technology employees continues to decline

Although employment in the manufacturing industry is already improving, the number of employees in the information technology sector has seen a steady decline since the beginning of 2025. This decline continued in the quarter now ended. At the same time, turnover in the information technology sector has continued to increase, with year-on-year growth of 10 per cent in January–July. Until 2024, turnover and the personnel count in this sector both followed an upward trend. That said, in practice turnover has grown at a faster pace than the number of employees for several years. Since 2025, the trends in turnover and personnel count have diverged.

With the rapid development of artificial intelligence, we are living through a period of tremendous technological transformation, and this has an impact on working life. Software development and coding have been at the forefront of the AI revolution. The nature of the work in this field at the very least has changed significantly in recent years.

However, we need data covering a longer period in order to draw more accurate conclusions about developments in the industry and the potential longer-term impact of artificial intelligence on the industry’s turnover and employees.

Technology industries in Finland

Order books strengthen, driven by shipyards and the defence industry

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 July–September period was 19 per cent higher than in the previous quarter, and 50 per cent higher year-on-year. Orders from the marine and defence industries contributed substantially to the remarkably high order intake.

At the end of September, the value of order books was 14 per cent higher than at the end of June and 34 per cent higher than in September 2025.

On the basis of order trends this 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, remained at a level indicative of a pickup in demand in the autumn and stood at +15 in October. The balance figure has been positive since April 2025. It fell slightly compared to July, but still points to strong demand and market activity. The positive balance figure indicates that the markets seem to have continued to pick up in spite of global uncertainty.

The number of personnel employed by technology industry companies in Finland at the end of September was 331,100. This figure is about 0.3 per cent, or 900 people, higher than in June.

According to the personnel survey by Technology Industries of Finland, the number of employees affected by temporary lay-off procedures at the end of September was approximately 10,100. The number of temporary lay-offs increased compared to June, but remains moderate. New hires remained almost at the same level in July–September 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 4 November 2026.
Next Economic Outlook will be published 3rd February 2027 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