News
26.2.2010 Federation’s environmental policy initiative encourages enterprises to become pioneers
25.2.2010 A flexible approach needed to the recruitment of educators in the field of technology
10.2.2010 Subcontracting in the technology industry set to recover gradually
2.2.2010 Turnover remains extremely low, staffing changes continue
Turnover remains extremely low, staffing changes continue
Outlook for the Finnish Technology Industry 1/2010: Order books for the Finnish technology industry have continued to shrink. Although new orders in the fourth quarter of 2009 were 6 % higher than in the fourth quarter of 2008, they were still 40 % lower than they were before the current crisis began in the autumn of 2008.
As a result of the economic crisis, competition has dramatically increased and this has forced enterprises to cut costs and improve productivity. Simultaneously, global structural change, which is shaking the technology industry, continues apace.
The improvement of Finland’s competitiveness is a matter of extreme urgency. There is a risk that jobs lost during the current slump may never return. Company taxation must now be developed in a way that supports growth, R&D incentives must be increased and training should be invested in. Labour market settlements must not raise costs in Finland. The availability of reasonably priced electricity must be ensured.
The turnover of the technology industry shrank last year by around 30 %, falling from 78 billion euros in the previous year to 55 billion euros.
Enterprises received 6 % more new orders in the last quarter of 2009 than in the last quarter of 2008 and 5 % more new orders than in the third quarter of 2009. This increase in orders indicates that the market situation has stabilised, although in many companies these orders are of short duration. Despite this growth, in the fourth quarter of 2009 new orders were 40 lower than just before the crisis, in July to September 2008.
The value of order books at the end of December 2009 was 29 % lower than in December 2008 and 12 % lower than in September 2009. Nearly half of Finnish enterprises reported that order books had shrunk since September and over 40 % reported they had grown.
Uneven recovery from global economic crisis
The global economy has returned to growth after last year’s decline. However, this growth is distributed unevenly. China, India and other emerging Asian markets, as well as Brazil and the Middle East, are playing a crucial role in the recovery. By contrast, economic development in Europe, the USA and Japan remains unsteady and supported by massive, economic stimuli based on public borrowing.
The majority of sales from the technology industry in Finland go to Europe. Economic recovery in Europe has been slow and painful. Industrial production in the region has grown only slightly in the last few months and remains nearly a fifth below the pre-crisis level of early 2008. Correspondingly, new orders received by industry in Europe are 25 per cent below the pre-crisis level. Recovery in Europe is hindered by major underemployment and poor development in investments. Since technology industries in Finland focus on producing investment goods, this will have a long-term effect on Finland's chances of recovery.
As a result of the significant fall in turnover, job cuts continued in Finland. Last year, the number of workers in the technology industry fell by almost 10 %, or 24 000 employees, to a total of 255 000 at the end of December. In December, over 55 000 employees were within the temporary lay-off system.
Finland needs a survival plan
The technology industry, Finland’s largest employer, is at the most crucial stage in its history. Finland needs a survival plan employing every means at its disposal to improve competitiveness and promote investment. A successful export industry is a precondition for the welfare of Finland, both now and in the future.
- The decrease in industrial investments is a major concern. Finland must fight for investments, and use all the means at its disposal to promote industrial investment. Welfare is built on a strong industrial core, around which companies can build increasingly competitive services. This can only be done with top-level research and education that maintain and support world-class know-how, says Martti Mäenpää, Director General of the Federation of Finnish Technology Industries.
- Improving the competitiveness of the operating environment in Finland is a question of life and death. The jobs that are now lost are in danger of disappearing from Finland for good, which might unbalance the public economy in the long term. At this rate, production industries will be forced to move away from Finland. In doing so, they will be accompanied by a significant share of the services industry, emphasises Mäenpää.
- Future decisions on energy will have an enormous impact on the future of this country. All arguments based on the economy as well as climate policies are in favour of approving the applications for three nuclear power plants. Nuclear power and renewable sources of energy should not be intentionally polarised. The plans for raising industrial energy taxes in 2011 must be cancelled. Decisions that stop investments would be irresponsible considering the future of this country, says Mäenpää.
THE FEDERATION OF FINNISH TECHNOLOGY INDUSTRIES
Mika Nykänen, Communications Director, Tel. +358 40 825 7329
Further information: Martti Mäenpää, Director General, Tel. +358 9 192 3310
Jukka Palokangas, Chief Economist, on economic trends and labour market developments; Tel. +358 40 750 5469
