TechnoBaro, September 2025

Growth Struggles to Take Off as the Weight of Uncertainty Holds Back the Start

The technology industry has been anticipating better times since last year, following an extended sluggish period. In March, the bottom of the cycle was passed and expectations were high. However, since then, the growth curve has remained disappointingly shallow. Growth has been hampered above all by trade policy turbulence and general uncertainty. Although a tariff agreement between the United States and the EU was reached in late July, recent news about the possible extension of steel tariffs to finished products that use steel continues to create uncertainty in technology industry markets.

Demand Is Improving – Frustratingly Slowly

The latest TechnoBaro survey shows that the gradual improvement in the technology industry’s business cycle has continued over the past three months across all key indicators. New orders, order books, production, and employment have all improved in terms of balance figures, meaning that a majority of companies assessing the change reported an improvement compared to early summer.

In services — i.e., information technology as well as design and consulting — the recovery in new orders and order books has been stronger than in manufacturing. This result is logical considering that the most significant recent risk factor, trade policy turbulence, has hit manufacturing and goods exports harder than services. Moreover, positive momentum in investments related to digitalisation and artificial intelligence may support growth in services.

A slightly worrying sign is that, according to TechnoBaro, large companies employing more than 150 people have a less positive view of the business cycle than smaller firms. This may indicate that the uncertain global situation is weighing particularly on demand for large export companies and that investment decisions are still not picking up decisively.

Although the indicators are now on the growth side, the pace remains frustratingly slow. Balance figures for new orders, order books, employment, and production shows that, in March, before the trade policy turbulence, expectations for future growth looked promising. The “tariff circus” has since slowed growth, and instead of a strong upturn, we have entered a path of sluggish recovery.

Production to Pick Up, Employment to Recover Slowly

Production is expected to grow during the autumn, partly as a result of new orders that picked up in the spring. Employment is expected to remain stable or increase slightly, but a clear upward turn in headcount would require a stronger boost in new orders. There is little difference in expectations between industry and services, but large companies remain more pessimistic than small ones.

While indicators of the business cycle have developed more slowly than hoped, the general global economic situation offers hope that demand recovery may continue. Particularly positive is the fact that the euro area industrial purchasing managers’ index has climbed into growth territory after more than three years. Over 90 percent of the Finnish technology industry’s production is exported, making it highly dependent on global conditions and export demand.

The past few years have been marked by uncertainty and succession of crises. Although the situation has stabilised somewhat due to more moderate interest rates and the tariff agreement reached in the summer, uncertainty remains stubbornly high and continues to slow growth prospects. Throughout the summer, companies have reported that while requests for quotations are coming in, very few customers dare to make final purchasing decisions. For now, it seems that the recovery will remain slow, and the goal of stronger growth has once again moved further away.

Investment Growth Focused on Digitalisation and R&D

The sluggish economic situation has also been reflected in companies’ assessments of investments to be realised this year. Realism has prevailed, and balance figures for investment trends have edged down over the course of the year.

Encouragingly, despite the weak economic year, companies appear determined to persistent with their digitalisation investments, and compared to the summer, slightly more companies now expect to increase their R&D investments. In addition, 85 percent of technology industry companies report that they will invest in artificial intelligence this year.

At present, companies are focusing especially on digitalisation, artificial intelligence, and research and development. At the same time, fixed investments — such as investments in premises, machinery, and equipment — are declining.

The generally weak economic environment affects investments in two ways: the technology industry produces many investment goods, and in a weak economy investment decisions have been on hold, reducing demand for the technology industry. At the same time, weak demand and poor economic conditions delay companies’ own investment opportunities.

The survey was conducted from Monday 8 September to Friday 12 September 2025.
The survey was sent to the CEOs of member companies of Technology Industries of Finland.
Of 1,707 recipients, we received 357 responses, giving a response rate of 21 percent.

Further information

Economy and Sustainable Growth

Mikkonen Hanne

Senior Economist – Economic Development and Investment Technology Industries of Finland

+358 440296152 hanne.mikkonen@teknologiateollisuus.fi