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Situation and Outlook of the Finnish Technology Industry 2/2013
Published: 24-Apr-2013 11:10 am
Publisher: Teknologiateollisuus ry
Order volumes drop significantly in technology industry
Order development in the industry has been weak, and export activity is at an all-time low. The situation varies greatly between individual companies, and some of them are loss-making. Local bargaining is necessary to support companies’ adjustment, creation of jobs and investments.
The turnover of technology industry companies in Finland decreased slightly in 2012 and came to some EUR 67 billion. In January this year, turnover was four per cent lower than twelve months earlier. Turnover has contracted by EUR 14 billion due to the financial crisis.
Significant drop in new orders
The companies that took part in the Federation of Finnish Technology Industries' survey of order books reported that the monetary value of new orders between January and March was 16 per cent lower than in the corresponding period of 2012, and 22 per cent lower than in the preceding quarter.
At the end of March, the value of order books was eight per cent less year-on-year, and also eight per cent less than at the end of December.
The downward trend in new orders is a serious matter.
“The collapse and continuing low level of Finnish exports since 2008 is unprecedented. For the first time in our economic history, exports have not recovered and returned to the level recorded before the slowdown or recession,” says CEO Jorma Turunen of the Federation of Finnish Technology Industries.
Based on the order trends in recent months, the turnover of technology industry companies is expected to be lower over the next few months than in the corresponding period last year.
Local bargaining can secure jobs and support investments
About one-quarter of the member companies of the Federation of Finnish Technology Industries have reported an operating loss.
“While some companies are loss-making no matter what the overall economic situation is, the share of loss-making companies has almost doubled since the start of the financial crisis. Having said that, Finland also has growing businesses and industries. Companies cannot succeed in Finland unless we take care of and maintain our competitiveness,” says Executive Vice President Risto Alanko of the Federation of Finnish Technology Industries.
“Labour market solutions can promote companies’ ability to adapt, invest and create jobs by salary and work time agreements that take place mainly at the company and workplace level. This is the only way to take into account the differences between companies’ productivity and profitability and also look after the interests of struggling companies. Industrial peace regulation must support responsible and stable labour market policies and economic development,” Alanko emphasises.
He points out that, when improving its competitive position, Finland could take advantage of the good practices and models established by its competing economies.
Personnel numbers reduced in Finland and abroad
Personnel numbers in the technology industry in Finland decreased slightly between January and March and totalled some 288,000. At the end of March, some 20,000 employees were affected by temporary or part-time lay-offs. In 2008, prior to the financial crisis, the industry employed 319,000 people in Finland.
The number of employees employed by the foreign subsidiaries of Finnish technology industry companies shrank by eight per cent in 2012, and came to 300,000 at the end of December. Staff numbers abroad fell in particular in electronics companies. On the other hand, Finnish mechanical engineering companies continued to recruit a lot more foreign employees. As a result of restructurings, metals industry companies also increased their foreign personnel.
Jorma Turunen, CEO, tel. +358 500 445 444
Risto Alanko, Executive Vice President, tel. +358 40 502 6411
Jukka Palokangas, Chief Economist, tel. +358 40 750 5469
The main Finnish technology industries are the electronics and electrotechnical industry, mechanical engineering, the metals industry, consulting engineering and information technology. The technology sector is responsible for 80% of all commercial research and development investments and 60% of Finland’s total exports. More than 70% of the sector’s turnover is generated in the global market. The Federation of Finnish Technology Industries has more than 1,600 member companies, covering almost 90% of the entire Finnish technology industry.