TechnoBaro, December 2025

• Demand recovery has continued toward the end of the year
• Outlook for early next year is positive, but uncertainty still clouds prospects
• Investment intentions are increasing, with growth focused on digitalization and AI

TechnoBaro offers glimmers of hope for the economic cycle

The wait has felt long. For more than a year and a half, expectations have been pinned on an upturn in the economic cycle, but the finish line for growth has kept moving further away. The journey has been marked by considerable turbulence: geopolitical uncertainty and the tariff war have slowed the recovery. Since last spring, despite global turmoil, the economy has been stuck in sluggish growth, with demand improving only in small steps.

The economic cycle is gradually moving in a more favourable direction

Based on the latest TechnoBaro survey, the improvement in demand has continued toward the end of the year. The balance figure for new orders stands at +12, the highest level recorded in TechnoBaro in over a year. A similar level was last seen in March, before the tariff war initiated by the United States in early April. The balance figure for order books is +7, indicating that order backlogs have also strengthened in recent months.

The gradual improvement in employment appears to have continued toward the end of the year. So far, the slow recovery has mainly been reflected in a sharp decline in the number of temporary layoffs. However, the modest pick-up in demand has not yet been sufficient to turn employment growth positive. The current employment balance figure is +5, indicating a slight positive trend during the autumn. The production balance figure is also positive, suggesting that production has increased slightly over the autumn.

Encouragingly, large companies employing more than 150 people assess the end-of-year situation more positively than smaller firms. Large companies are at the forefront of international demand. When conditions improve for large firms, the positive effects are transmitted through subcontracting chains to the broader SME sector. Ultimately, around 90 per cent of Finnish technology industry output is exported, making the sector heavily dependent on international markets and the success of exporting companies.

Outlook for early next year clearly on the positive side

Companies’ expectations for early next year are positive. The production balance figure is +24, meaning that a clearly larger share of respondents anticipate growth rather than a decline in production. The employment balance figure is as high as +15. This gives cautious hope that employment in the technology industry could begin to grow slightly next year, provided no unexpected shocks occur.

Outlooks for early next year are positive in both manufacturing and services, with service companies viewing prospects more favourably than manufacturing firms.

Although TechnoBaro currently sends cautiously positive signals about the economic cycle, it is important to note that market uncertainty remains exceptionally high. This is particularly evident in companies’ open-ended responses.

Investment intentions picking up toward the end of the year

Investment intentions have remained fairly subdued throughout 2025, and as recently as summer it appeared that growth in planned investments for this year was weakening. Toward the end of the year, however, the figures have improved, and the investment balance figure has risen. This means that more companies than before expect their investments this year to increase compared to last year. Growth in investment is strongly focused on digitalisation, artificial intelligence, and R&D. Among fixed investments, spending on premises has declined slightly compared to last year, while investments in machinery and equipment have increased somewhat.

Around half of companies have invested this year in machinery and equipment, digitalisation, and R&D. One in four has invested in premises. A vast majority—fully 90 per cent—have invested in artificial intelligence. This question does not address the scale of investments. According to Statistics Finland, technology industry companies invest more than EUR 8 billion annually in Finland. Of this, approximately EUR 4.5 billion consists of fixed investments and EUR 3.7 billion of R&D investments. In monetary terms, fixed investments therefore exceed intangible investments.

The same trend in investment targets is expected to continue next year. Companies plan to further strengthen investments particularly in digitalisation, R&D, and artificial intelligence. Encouragingly, one-third of respondents in manufacturing estimate that investments in machinery and equipment will increase next year.

We asked companies whether investments this year have focused more on growth-oriented or maintenance-oriented projects. For 60 per cent of respondents, maintenance investments accounted for a larger share than growth investments. Open-ended responses reflect the uncertainty and weak economic conditions of this year, which may have constrained opportunities for growth investments. Positively, investment growth is anticipated next year.

Finland’s strengths: energy and infrastructure

There is currently intense global competition for industrial investments. We asked TechnoBaro respondents which factors they see as Finland’s strengths or bottlenecks when companies consider investment locations.

Finland’s strengths are energy, partnerships, and infrastructure. Investments in renewable and carbon-free energy have paid off, and energy availability and price are among Finland’s key competitive advantages. According to companies, weaknesses include taxation, labour costs, predictability of regulation and the political environment, and permitting processes.

Our ability to influence global competition over state aid is limited. However, we can influence our own operating environment. Improving the predictability of regulation and the political environment, as well as streamlining permitting processes, are largely within Finland’s control. Taking care of these issues does not necessarily involve additional costs but would enhance Finland’s attractiveness as an investment destination.

The survey was conducted from Monday 8 December to Friday 12 December 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