Unemployment time bomb is ticking in Finland’s export industries

A fifth of technology industry workers in sweep of temporary dismissals

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Finland’s technology industries revealed yesterday their somewhat pessimistic prospects for the near future.
      Those who expected to hear how the recovery of the world economy would have radically perked up Finland’s heavy industries were treated to a cold shower.
      Even though a distinct turn upwards can be seen in the order figures, the prospects are very weak indeed, says Martti Mäenpää, director-general of the Federation of Finnish Technology Industries.
      “A large portion of the volume of orders has been short-term indents. The recovery from last year’s 30-per cent drop in net sales will take a long time”, Mäenpää continues.
     
Technology sectors, such as the electronics, engineering, and metal industries, account for 60 per cent of Finland's exports.
      The slump in the branch may pose a threat to up to tens of thousands of jobs this year.
      Last year the workforce employed by the member firms of the Federation of Finnish Technology Industries was reduced by 24,000 people. The figure accounted for a third of all the jobs lost in Finland in 2009.
      Currently no less than 57,000 individuals, a fifth of the total workforce in the branch, are experiencing temporary dismissals of various kinds.
      Technology Industries deputy director-general Risto Alanko estimates that about half of those people are simultaneously off work.
     
If the demand does not pick up quickly, a large portion of the lay-offs may turn into permanent redundancies.
      “More than likely the situation will lead to further labour reductions. And those jobs that now disappear from Finland are unlikely to ever come back. The investments will be made elsewhere”, Mäenpää says.
     
The bleak outlook of the technology industries stems from the world’s investment slump.
      World Bank Chief Economist Justin Yifu Lin predicted recently in Helsingin Sanomat that it will take until 2014 before the over-capacity situation with production has been dealt with.
      The propects for Nokia, which manufactures consumer goods, are slightly brighter than that for the heavy industry companies such as Wärtsilä and Kone, but even this does not give the forecasters much to smile about.
      “This does not necessarily reflect the situation in Finland. For a global company the reality in Asia may be very different from the demand in Europe, which the Finnish production primarily serves”, economist Jukka Palokangas estimates.
     
So far, fewer jobs have disappeared from the electronics industry compared to the machinery and metal industries.
      According to Palokangas this is because a large portion of the work is research and development that serves global production.


Previously in HS International Edition:
  Finland´s employment measures are lagging behind other OECD countries (17.9.2009)
  Nasty negative numbers for the New Year (5.1.2010)

See also:
  Temporary lay-offs unique Finnish labour policy contrivance (10.2.2009)
  Finnish trade unions would prefer shortened working hours to lay-offs (20.2.2009)

Helsingin Sanomat