Finnish tech exporters post strong numbers, defying Nordic industrial slump and global turbulence

• Technology Industries of Finland survey reveals unexpectedly positive export figures despite global instability
• Finnish firms are outperforming Swedish and German competitors, raising questions about structural advantages
• Defence-adjacent sectors and Nordic rearmament spending may be driving part of the resilience
• The Iran conflict remains a downside risk if it disrupts supply chains or energy markets

Finnish technology exporters are beating expectations. A fresh survey by Teknologiateollisuus (Technology Industries of Finland) shows export firms reporting strong order books and an upbeat revenue outlook for 2025, Kauppalehti reports, a result that caught even industry insiders off guard given the turbulence in global trade this year. The original Finnish headline captured the mood bluntly: "What war? Finnish companies are now slamming surprisingly strong numbers on the table."

The data cuts against the prevailing narrative of Nordic industrial decline. Swedish manufacturing has been weighed down by a weak krona, soft domestic demand, and an export sector heavily exposed to a slowing European auto industry. Germany — long the engine of European industrial output — is mired in what some economists now call a structural recession, with factory orders falling and energy costs still elevated relative to pre-2022 levels. Finland, by contrast, appears to have found pockets of demand that its neighbours have not.

The obvious question is what explains the divergence. Part of the answer may lie in Finland's market mix. Finnish technology exporters have significant exposure to defence, communications infrastructure, and heavy machinery — sectors where demand is being driven by Nordic and European rearmament budgets rather than consumer spending cycles. Finland's own defence spending has surged since NATO accession, and the broader Nordic rearmament wave is funnelling procurement contracts toward regional suppliers. Companies like Patria, but also a tier of smaller firms supplying components and systems, are direct beneficiaries. Whether the resilience extends beyond defence-adjacent sectors to broader industrial exports is less clear from the survey data alone.

Labour costs offer another partial explanation. Finland's unit labour costs have been more competitive than Sweden's in recent years, partly a legacy of the 2016 Competitiveness Pact (kilpailukykysopimus) that cut holiday bonuses and extended working hours without pay increases. The pact was politically painful and deeply unpopular with unions, but it reset Finland's cost base relative to its Nordic peers. Swedish manufacturers, meanwhile, have absorbed successive rounds of above-inflation wage agreements.

The survey is not without caveats. Teknologiateollisuus notes that the Iran conflict — which has escalated through the first half of 2025 — poses a material downside risk. Prolonged hostilities could disrupt shipping routes, spike energy prices, and sour business sentiment across Europe. Finnish exporters are not immune to those forces; they are simply, for now, outrunning them. The question is whether the order books reflect genuine structural strength or a temporary surge in defence-related procurement that masks weakness elsewhere in the industrial base.

For the other Nordic economies watching from the sidelines, the Finnish numbers are a useful benchmark. Denmark's industrial sector is dominated by pharmaceuticals and wind energy — different dynamics entirely. Norway's non-oil exports remain modest. Sweden, the closest industrial comparator, has seen its flagship exporters — Volvo, Ericsson, SKF — issue cautious or downgraded guidance in recent quarters. If Finnish firms are thriving while Swedish ones tread water, the structural factors deserve closer scrutiny than they have received.

Finland spent years being told its economy was too rigid, too dependent on Nokia's corpse, too slow to reform. Its technology exporters are now posting numbers that Berlin and Stockholm would envy — fuelled, in no small part, by the fact that Europe's fastest-growing budget line is ammunition.

Sources: Kauppalehti