Hard times for technology branch expected to continue for at least a year
Darkest prospects for engineering works; mobile phone manufacturers doing better
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“I can’t say that there would be light on the horizon for 2010", says Martti Mäenpää, director of the Federation of Finnish Technology Industries.
On Wednesday, he sharply disagreed with those Finns who expect rapid improvement in the economy.
While there have been forecasts of an upturn in the global economy, Mäenpää does not expect orders for the Finnish technology industry to show any quick improvements in 2010.
The forecast is similar to one that was made last month by the Research Institute of the Finnish Economy (ETLA).
The reason for the pessimism is the depressed state of investments - the fact that demand for papermaking machinery, harbour cranes, and other goods used in production is expected to remain low for a long time to come.
Finland has a large stake in industries which export goods used in production, which do not sell at times of low investments.
The technology industry employs about 250,000 people in Finland directly, and is responsible for 60 per cent of sales. It includes engineering works, the electronics industry, metal refining, and data technology companies.
In the third quarter of this year, technology industry companies got 40 per cent less orders than they did a year ago, according to a fresh report from the Federation of Finnish Technology Industries.
Orders had nevertheless risen by 11 per cent from the April-June period. This was attributed to the seasonal increase in mobile telephone sales, and to a few individual large orders for engineering works.
Jukka Palaokangas, the head economist of the Technology Industries Federation, says that there is no real improvement in sight in demand for the technology industry.
The recession continues to push down demand around the world, and even if consumers were to start buying again, it will take some time before companies start making more investments.
From 2003-2007 an investment boom prevailed around the world. International trade grew, and companies bought goods with which they could more easily meet the demands of consumer and other companies.
Much of this production capacity is lying idle, suggesting that many companies will not need to make investments for a long time.
On Wednesday, Mäenpää presented forecasts according to which fixed investments next year will remain at approximately their current level in the United States, France, Japan, and Germany.
What about 2011?
“I can only say that hopefully it will be better. We are in a fog to a great extent”, Mäenpää says.
“Everything depends on how the world economy starts up.”
Meanwhile, he expects technology industry companies to continue to reduce staff next year. Personnel declined by nearly 20,000 in technology companies in the first nine months of this year. A total of 54,000 people are affected by temporary redundancy plans.
Next year could be even worse than this year for engineering works, which have managed to maintain employment this year by delivering goods that had been ordered before the slump took hold.
Metallurgy is doing better than in the earlier in the year, when wholesalers were emptying their storerooms, and volume declined sharply.
In mobile telephony the dark market forecasts of the early part of the year have taken a more positive turn, but next year’s prospects remain murky.
While announcing the mainly grim prospects for the near future, the Federation of Finnish Technology Industries also urged on the government to promote Finnish competitiveness.
Mäenpää called for the authorisation of the construction of three new nuclear reactors, as well as tax incentives for corporate research and development work. He also called for a cut in energy taxes for energy-intensive branches of industry.
Helsingin Sanomat
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| 29.10.2009 - TODAY |
 Hard times for technology branch expected to continue for at least a year
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