The technology industry is in a worried mood: The year started well, but “Liberation Day” ushered in massive uncertainty
After a promising start to the year, the mood in the technology industry has become one of anxious expectation. The value of new orders improved year-on-year, and the balance figure for tender requests rose and turned positive for the first time in over two years. However, a survey of members reveals that there is great uncertainty. Due to Donald Trump's actions, investment decisions have been put on hold on a broad front.
Technology Industries of Finland’s latest survey of order books and personnel as well as the TeknoBaro survey conducted at the turn of April and May present mixed messages: after a long dry period, demand in the sector appears to be picking up, with indications of a hoped-for turnaround in exports, but at the same time, US President Donald Trump’s erratic tariffs are making companies worried.
“Despite a slight weakening in the outlook, the latest news from Finland and Europe should come as a relief rather than predicting a crisis. Nevertheless, there is cause for concern, as due to the prevailing uncertainty, it seems that investment decisions are now being put on hold on a broad front. There is a major risk that order intakes will be weak in the second quarter of 2025,” says Petteri Rautaporras, Director and Chief Economist at Technology Industries of Finland.
The monetary value of new orders in the January-March period was 25 per cent lower than in the previous quarter, but 9 per cent higher year-on-year. The substantial decline in orders is largely due to a very valuable ship order that was recognised at the end of 2024. However, the first-quarter order intake could be described as reasonably good compared to order intakes in earlier quarters last year.
At the end of March, the value of order books was 1 per cent lower than at the end of December, but 7 per cent higher than in March 2024.
The fact that the balance figure for tender requests was +7 in April is very welcome news. The balance figure rose into the black for the first time in over two years, even though the majority of the responses were received after Trump had dropped his “Libera tion Day” tariff bomb.
“It could be said that demand is finally showing signs of improvement, and no panic is evident among export companies. Instead, the mood in the manufacturing industry is one of anxious expectation. However, the massive uncertainty sowing doubt in the economy and geopolitics is utterly toxic to investments,” says Rautaporras.
On the basis of order trends at the turn of the year, the turnover of technology industry companies is expected to gradually start rising during 2025. Last year, the turnover of companies in this sector in Finland decreased by around one per cent year-on-year, totalling about EUR 98 billion. Turnover was depressed by both a decrease in production volumes and a decline in producer prices.
The most pressing problem is the uncertainty posed by tariffs
Companies estimate that potentially permanent tariffs on all trade would have a negative impact on turnover this year. Member companies were asked about the effects of the trade policy storm in the TeknoBaro survey at the turn of April and May. Forty per cent of the responding companies engage in direct exports to the United States.
For the time being, the impact of both the tariffs and all the talk about them remains moderate. Around half of the companies have not yet noticed any effects.
“The most concerning aspect is that a third of the respondents said that customers have pushed back their investment decisions. Companies still have a wait-and-see attitude and have not started taking any significant actions. Some of the companies that have direct exports to the United States have begun negotiating price changes to their contracts,” says Rautaporras.
The survey indicates that a variety of indirect factors will have the greatest negative impact on companies’ turnover this year, including general uncertainty, postponed investments, weaker demand, and factors affecting customers’ exports. In the view of one in four of the respondents, the most important factor was the direct impact of U.S. exports. In addition to tariffs, the most significant problem is thus the general state of uncertainty, which is making companies and customers cautious.
The growth ambitions of SMEs must be supported
The number of personnel employed by technology industry companies in Finland at the end of March was on a par with the end of December, around 328,000. The number of employees affected by temporary lay-off procedures at the end of March was approximately 16,000. Recruitment of new employees was moderate in January–March.
The tax package assembled by the Government in its mid-term policy review is – under the current circumstances characterised by competition driven by tariffs and state subsidies – an effective tool for supporting economic growth by improving Finland’s attractiveness and companies’ willingness to invest.
“The Government has taken the long-awaited step of stimulating growth. The proposed measures must be implemented quickly. A major flaw in it was that the euro limit for green transition investment incentives is too high for SMEs. The growth ambitions of SMEs represent a key driver of economic growth. For this reason, green transition investments of all sizes must be supported,” says Minna Helle, CEO of Technology Industries of Finland.
Another potential means of supporting SME growth would be to continue applying the accelerated depreciation method for machinery and equipment, or to make it permanent. The model could also be expanded to cover machinery and equipment bought secondhand.
Although the global market situation is chaotic and uncertain, the comments from companies that responded to TeknoBaro also reveal glimmers of hope. Many companies estimate that the tariffs imposed by Trump on Asia—higher than those on EU countries—may ultimately improve the competitive position of European companies in the United States. In addition, several are already actively seeking new export markets, including Canada, India, and Latin America.
“Europe may appear more attractive than before as an investment destination. Furthermore, the budding effort to increase Europe’s self-sufficiency presents opportunities that could boost demand for Finnish export companies. We must not respond to this instability with inaction – now is the time for proactive measures to find new markets and strengthen exports,” Helle states.
Further information:
Rautaporras Petteri
Director, Chief Economist Technology Industries of Finland