Technology industry / Finnish economic outlook

Technology industry /
Finnish economic outlook
December 2023
1
12/20/2023 Technology Industries
of Finland

The Finnish technology industry is comprised of
five sub-sectors
2
of Finland
ELEKTRONICS AND ELECTROTECHNICAL
INDUSTRY
ABB, Ensto, Murata Electronics, Nokia,
Planmeca, Polar Electro, Suunto, Vacon,
Vaisala…
METALS INDUSTRY
Boliden, Componenta, Kuusakoski,
Luvata, Outokumpu, Ovako, Sacotec,
SSAB …
MECHANICAL ENGINEERING
Abloy, Cargotec,, Fiskars, Glaston, Kone,
Konecranes, Metso, Meyer Turku, Neles,
Normet, Oras, Patria, Pemamek, Ponsse,
Prima Power, Stala, Valmet, Valtra,
Wärtsilä…
INFORMATION TECHNOLOGY
Basware, CGI, Digia, Efecte, Enfo,
F-Secure, Fujitsu Finland, IBM, Innofactor,
Knowit, Microsoft, Nixu, TietoEVRY…
CONSULTING ENGINEERING
AFRY, A-Insinöörit, Citec, Elomatic,
Etteplan, FCG, Granlund, Ramboll, Rejlers,
Sitowise, SWECO, WSP…

The Finnish technology industry is comprised of
five sub-sectors
3
ELEKTRONICS AND ELECTROTECHNICAL
INDUSTRY
• Data communications equipment, electrical
machinery, medical technology
• Turnover (2022): 21 billion euros
• Personnel (2022): 40,700
METALS INDUSTRY
• Steel products, non-ferrous metals,
castings, metallic minerals
• Personnel (2022): 16,000
MECHANICAL ENGINEERING
• Machinery, metal products, vehicles
• Personnel (2022): 135,800
INFORMATION TECHNOLOGY
• IT services, applications and
programming
• Personnel (2022): 83,500
CONSULTING ENGINEERING
• Expertise for construction industry and
infrastructure
• Personnel (2022): 54,100
of Finland

The technology industry –
the largest export sector in Finland
4
• Over 50 % of total exports.
• Some 338,000 employed directly in the
sector, including indirect effects 720,000
people.
• Effect on value added totaling € 63 billion,
or 29% of GDP value added.
• Bring to Finland € 23 billion tax revenue
annually.
• Investments almost EUR 6.0 billion
annually in Finland.
• 65 % of private-sector R&D investment.
of Finland

Value added to the economy generated by the
technology industry is EUR 55 billion, or over 28%
of GDP * (2017)
5
28.8, 53%
15.6, 29%
10.1, 18%
A total of EUR 54.5 billion
Impact on technology industry
(direct influence)
Impact on other industries
(indirect influence)
Impact on private consumption
(income effect)
*) GDP value added was EUR 193.3 billion in 2017.
Source: Economic Impact of the Technology Industry in Finland 11/2018
of Finland

Technology industry generates nearly 650,000 jobs
in Finland (over 25% of all employees) (2017)
6
304,600, 47%
225,800, 35%
114,600, 18%
A total of 644 900 employees
(direct influence)
(income effect)
10 jobs in the technology industry bring
11 jobs to the rest of the economy
of Finland

Every job in the technology industry generates
almost another job in the services (2017)
7
295,100, 87%
12,200, 3%
33,100, 10%
Impact on other industries and on
private consumption: 340,300 employees
Services*
Primary production
Processing*
*) Excl. the services industries in the technology industry.
of Finland

Technology industry generates over 18 billion
euros in tax revenue annually in Finland (2017)
8
9.2, 50%
4.3, 24%
4.7, 26%
A total of EUR 18.2 billion
(direct influence)
(income effect)
of Finland

Turnover of the technology industry in Finland
9
Source: Macrobond, Statistics Finland, Technology Industries of Finland
of Finland

10
*) In addition to goods exports the sector exported services worth some 16-18 billion euros.
Source: Finnish Customs, Statistics Finland
Export of tchnology industry goods from Finland
by area in 2022
Total goods exports 41.31 billion euros*
North America
5.10 billion €
12.4 %
Western Europe
22.02 billion €
53.3 %
South and
Middle America
1.51 billion €
3.6 %
Central and Eastern Europe
5.43 billion €
13.1 %
Africa
0.65 billion €
1.6 %
Middle and
Central East
0.51 billion €
1.2 %
Asia
5.99 billion €
14.5 %
of Finland

Turnover of the industry and technology industry
in Finland
11
Source: Macrobond, Statistics Finland
of Finland

Turnover of the technology industry in Finland
12
of Finland

Value of new orders in the technology industry* in
Finland
13
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
latest observation July-September 2023.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
Combined
Export
Domestic
Million euros, at current prices
Change: III,2023 / III,2022 III,2023 / II,2023
Export: -34 % -23 %
Domestic: -15 % -27 %
Combined: -30 % -24 %
*) Excl. metals
industry, game
industry and data
center companies
Technology Industries
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Value of order books in the technology industry*
in Finland
14
latest observation 30th September 2023.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
30,000
32,000
34,000
36,000
Export
Domestic
Change: 30.9.2023 / 30.9.2022 30.9.2023 / 30.6.2023
Export: -15 % -4 %
Domestic: -6 % -5 %
Combined: -13 % -4 %
*) Excl. metals
industry, game
industry and data
center companies
Combined
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Value of new orders in the electronics and
electrotechnical industry in Finland
15
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
Combined
Export
Domestic
Export: -26 % -6 %
Domestic: -5 % -19 %
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Value of order books in the electronics and
electrotechnical industry in Finland
16
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
9,000
Export
Domestic
Change: 30.9.2023 / 30.9.2022 30.9.2023 / 30.6.2023
Export: -23 % -4 %
Domestic: -9 % -9 %
Combined
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Value of new orders in the mechanical engineering
in Finland
17
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
Combined
Export
Domestic
Export: -43 % -40 %
Domestic: -22 % -34 %
Combined: -40 % -39 %
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Value of order books in the mechanical
engineering in Finland
18
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
Export
Domestic
Change: 30.9.2023 / 30.9.2022 30.9.2023 / 30.6.2023
Export: -12 % -4 %
Domestic: -6 % -4 %
Combined
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Turnover of the metals industry in Finland
19
Seasonal adjusted turnover index
Shares of turnover 2022: iron and steel products, non-ferrous metals and castings 91 %, mining of metal ores 9 %
Source: Statistics Finland
of Finland

Production volume of the metals industry in
Finland
20
Seasonal adjusted volume index
Shares of turnover 2022: iron and steel products, non-ferrous metals and castings 91 %, mining of metal ores 9 %
of Finland

Value of new orders in the consulting engineering
in Finland
21
0
50
100
150
200
250
300
350
400
Combined
Export
Domestic
Export: -49 % -13 %
Domestic: -19 % -20 %
Combined: -21 % -19 %
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Value of order books in the consulting engineering
in Finland
22
0
100
200
300
400
500
600
700
800
900
1,000
1,100
Export
Domestic
Change: 30.9.2023 / 30.9.2022 30.9.2023 / 30.6.2023
Export: -34 % -6 %
Domestic: -6 % -2 %
Combined: -7 % -2 %
Combined
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Value of new orders in the information
technology* in Finland
23
0
100
200
300
400
500
600
700
800
900
*) Excl. game industry and data center companies
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Value of Order Books in the Information
Technology* in Finland
24
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
Change: 30.9.2023 / 30.9.2022 30.9.2023 / 30.6.2023
Combined: -3 % -3 %
*) Excl. game industry and data center companies
of Finland
12/20/2023
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Technology Industry Personnel
25
12/20/2023 Technology Industries of
Finland
Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond
September
30th
9,500 employees affected by
temporary lay-offs 30th
September 2023

Technology Industry Personnel in Finland by
Industry
26
Finland
September
30th

Technology Industry Personnel in Subsidiaries
Abroad by Industry
27
Finland
Source: The Federation of Finnish Technology Industries’ labour force survey, Macrobond

Abroad by Location
28
Finland

Abroad by Location
29
Finland

Abroad by Country
30
Finland
Information from year 2022, total 278 000
94 200
5 800
6 700
8 000
9 900
14 700
16 200
18 400
26 200
33 200
44 200
Others
10. Italy
9. Norway
8. UK
7. France
6. Sweden
5. Poland
4. Germany
3. USA
2. India
1. China
34%
2%
2%
3%
4%
5%
6%
7%
9%
12%
16%
Others
10. Italy
9. Norway
8. UK
7. France
6. Sweden
5. Poland
4. Germany
3. USA
2. India
1. China

Personnel in Electronics and Electrotechnical
Industry
31
Finland
September
30th

Electronics and Electrotechnical Industry
Personnel in Subsidiaries Abroad
32
Finland

Personnel in the Mechanical Engineering
33
Finland
September
30th

Mechanical Engineering Personnel in Subsidiaries
Abroad
34
Finland

Personnel in the Metals Industry
35
Finland
September
30th

Metals Industry Personnel in Subsidiaries Abroad
36
Finland

Personnel in Consulting Engineering
37
Finland
September
30th

Consulting Engineering Personnel in Subsidiaries
Abroad
38
Finland

Personnel in Information Technology
39
Finland
September
30th

Information Technology Personnel in Subsidiaries
Abroad
40
Finland

Retirement of technology industry personnel in
Finland
41
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Salaried employees
Blue collar employees
Individuals per year
Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics Finland
of Finland
12/20/2023

Retirement of technology industry blue collar
employees in Finland
42
0
500
1000
1500
2000
2500
3000
3500
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Mechanical engineering Metals industry Electronics and electrotechnical industry
Individuals per year
Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics Finland
of Finland
12/20/2023
Number of individuals retiring
(estimation)
Number of individuals retired

World economic outlook
- Finland as a part of global
economy
43
12/20/2023 Technology Industries of Finland

GDP in Euro Area and Finland by quarter
44
Lähde: Macrobond
of Finland
12/20/2023

Export of goods and services from Finland and
Euro Area by quarter
45
Source: Macrobond, Eurostat
of Finland

GDP by demand sector in Finland by quarter
46
of Finland
12/20/2023

GDP in some western countries
47
Souce: Macrobond
of Finland
12/20/2023

48
Source: Macrobond
GDP in large developing countries
China, India, Brazil and Russia account for 31% of the world economy, adjusted for purchasing power
of Finland

Purchasing Manager Indices for the entire
business sector in Finland’s most important export
countries
49
Source: Macrobond. Markit
of Finland

Industrial Production Volume in USA, EU, Japan
and Finland
50
Finland
Seasonally adjusted volume index
Source: Macrobond

Industrial Production Volume in EU-Countries
51
Finland
Seasonally adjusted volume index
Source: Macrobond

Industrial production globally
52
Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis
of Finland
12/20/2023

Purchasing Manager indices for the manufacturing
industries
53
Source: Macrobond, Markit
of Finland

Purchasing Manager indices for the manufacturing
industries in major developing countries
54
Source: Macrobond, Markit
of Finland

Exchange rates (when the curve rises, the value of the
Euro strengthens against the other currency)
55
Source: Macrobond
of Finland

56
Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis
Goods export volume
of Finland
12/20/2023

Chinese goods imports
57
Source: Macrobond
of Finland

EU exports to Russia
58
Source: Macrobond
of Finland
12/20/2023

Russia’s* share of the technology industry's
Finnish exports
59
*) Soviet Union up to 1991
Source: Finnish Customs
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
30
32
34
36
38
40
42
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
of Finland
12/20/2023
%

Finland’s economic growth
relies on exports and
investments
60
of Finland
12/20/2023

Export of goods and services
61
of Finland
12/20/2023

Business investment
62
Source: Macrobond, OECD Economic Outlook

Industrial tangible and intangible investment* in
Finland
63
*) Including software investments.
Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey June 2022
0
1
2
3
4
5
6
7
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22e
Tangible investment
Intangible investment
Intangible investment (excl.
electronics industry)
Billion euros, at fixed 2015 prices
of Finland

Industrial investment and consumption of fixed
capital in Finland
64
*) Including software investments.
Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey June 2022
0
1
2
3
4
5
6
7
8
9
10
11
12
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22e
Tangible and intangible
investment*
Consumption of Fixed
Capital
of Finland

Industrial production capital loss in Finland
65
Source: Statistics Finland (National Accounts)
0
5
10
15
20
25
30
35
40
45
50
55
60
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Cumulative consumption
of tangible capital
Cumulative tangible
investment
of Finland
=6,2 bill. €

Industrial tangible investment
66
Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, June 2022
60
70
80
90
100
110
120
130
140
150
160
170
180
190
200
210
220
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22e
Hungary
Poland
Netherlands
Austria
Germany
Chech
Republic
Sweden
Belgium
Finland
Billion euros, at fixed 2015 prices, index 2005=100
of Finland

Investment rate in industrial tangible investments
67
Source: Eurostat (National Accounts)
6
8
10
12
14
16
18
20
22
24
26
28
30
32
34
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Hungary
Poland
Netherlands
Austria
Germany
Czech
Republic
Sweden
Belgium
Finland
Tangible investments / value added, %
of Finland

Industrial intangible investments
68
*) Intangible investments include research and development and software investments etc.
Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, June 2021
40
60
80
100
120
140
160
180
200
220
240
260
280
300
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22e
Hungary
Poland
Netherlands
Austria
Germany
Czech Republic
Sweden
Belgium
Finland, excl.
electronics industry
Finland
Billion euros, at fixed 2015 prices,
index 2005=100
of Finland

Investment rate of industrial intangible
investments*
69
*) Intangible investments include research and development and software investments.
Source: Eurostat (National Accounts)
0
2
4
6
8
10
12
14
16
18
20
22
24
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Hungary
Poland
Netherlands
Austria
Germany
Czech Republic
Sweden
Belgium
Finlans, excl.
electronics industry
Finland
Intangible investments / value added, %
of Finland

Productivity* development in Finland
70
Finland
*) Productivity is measured as real value added per hours worked. When productivity grows
(the curve rises) value added grows more than hours worked.

71
Latest information April-June 2022.
Source: Eurostat: Quarterly National Accounts
GDP productivity development
GDP at fixed prices / hours worked
82
84
86
88
90
92
94
96
98
100
102
104
106
108
110
112
114
116
118
Euro countries
Sweden
Finland
Germany
Index 2008=100 (the year before the collapse of Finnish industrial production capacity)
Finland

72
Latest information April-June 2022.
Source: Eurostat: Quarterly National Accounts
Industrial productivity development
Industrial value added at fixed prices / hours worked
60
65
70
75
80
85
90
95
100
105
110
115
120
125
130
135
Euro countries
Sweden
Finland
Germany
2008=100 (the year before the collapse of Finnish industrial production capacity)
Finland

73
Corporate investment rate
of Finland

74
Finland’s cost competitiveness compared to the
average of Euro countries
Unit labour costs in the whole economy = labour costs / productivity, including the influence of effective
exchange rates
94
96
98
100
102
104
106
108
110
112
2000=100
2005=100
2008=100
Finland’s price
and cost
competitiveness
declines
Finland’s price
and cost
competitiveness
improves
of Finland
*) In the ECB Harmonised Competitiveness Index, the average effective exchange rate of each country is calculated vis-à-vis 38
main trade partners, as well as the development of unit labour costs for the total economy.
Latest information January-March 2022. Source: European Central Bank
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22

Member Companies of the
Federation of Finnish
75
of Finland

The Federation’s Member Companies 2022
76
250–499 employees
82,082
39%
32,615
15%
32,720
15%
63,728
30%
1 634
90%
95
5%
49
3%
28
2%
Number of enterprices / 1 806 Number of personnel / 211 145
1–249 employees 500–999 employees
1000– employees
of Finland

The Federation’s SME Member Companies 2022
77
508
31%
568
35%
324
20%
234
14%
Number of enterprices / 1 634 Number of personnel / 80 082
5 293
6%
18 507
23%
22,603
28%
35,679
43%
1–19 employees
20–49 employees
50–99 employees
100–249 employees
of Finland

Operating Profit in the Member Companies of
Technology Industries of Finland in 2020
Operating profit-% = operating result / turnover * 100 (before taxes and financial income
and expenses)
78
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
(Median: 5,2 %)
Good (30 %)
Satisfactory (22 %)
Weak (26 %)
Unprofitable (22 %)
Companies in random order
of Finland

Net Profit in the Member Companies of Technology
Industries of Finland in 2020
Return on assets -% = (net income + financial expenses + taxes) / (capital invested in the financial
year) * 100
79
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
(Median: 4,2 %)
Unprofitable (24 %)
Good (25 %)
Satisfactory (21 %)
Weak (30 %)
of Finland

Return on Assets in the Member Companies of
Equity ratio -% = (total equity + total appropriations accrued) / adjusted balance sheet *
100
80
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
(Median: 11,9 %)
Good (43 %)
Unsatisfactory (11 %)
Mediocre (26 %)
Weak (20 %)
of Finland

Equity Ratio in the Member Companies of
Equity ratio -% = (total equity + total appropriations accrued) / adjusted balance sheet *
100
81
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100
(Median: 44,9 %)
Good (56 %)
Satisfactory (23 %)
Weak (21 %)
of Finland

Technology industry / Finnish economic outlook

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