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Technology Industries of Finland
COVID-19: Impact on the engineering and
construction sector in FINLAND
Helena Soimakallio
CEO, Finnish Association of Consulting Engineering Firms SKOL ry
RINORD Webinar on the 5th May 2020
24.5.2020 Teknologiateollisuus
Market was already slowing down in Finland
before COVID-19 crisis.
Productivity development has been stagnant
and net profit has stayed below 5 % in CE
industries.
34.5.2020 Teknologiateollisuus
Residential housing construction:
New projects and building permits have a downward trend since last summer
BLUE = Number of building permitsGREEN = Number of new projectsPURPLE = Number of finished projects
Public Buildings:
New projects and building permits have a downward trend since last summer
BLUE = Number of building permitsGREEN = Number of new projectsPURPLE = Number of finished projects
Productivity* Development in Technology Industry
by Branches
65/4/2020 Technology Industries of Finland *) Productivity is measured as real value added per hours worked. When productivity grows (the curve rises) value added grows more than hours worked.Source: Statistics Finland
Net Profit-% of the Technology Industry in Finland
by Branches
75/4/2020 Technology Industries of Finland Net Profit-% = Net Profit / Operating Income in total * 100Source: Statistics Finland
World economy is in crisis caused by the
COVID-19 pandemic.
There has been a sharp shock to the global
to the global economy, but how long will it
last?
The longer the outbreak persists, the
greater the chance of a more prolonged and
more severe impact on the global and local
economies will become.
84.5.2020 Teknologiateollisuus
Lockdown of personnel and/or clients, lack of new orders and postponed projects are the most common challenges faced by the CE firms.
94.5.2020 Teknologiateollisuus
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55%
Lack of materials or components
Other restrictions set by the client
Lockdown of the client or staff
Lack of new orders
Postponing ongoing projects
Cancellation of projects
Lack of staff because of the quarantee
Clients are not paying their bills
Restrictions to travel
Strong effect Moderate effect Some effect
Lähde: Teknologiateollisuus ry:n koronapulssi –jäsenkysely28.4.2020 n=78.
104.5.2020 Teknologiateollisuus
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Lack of materials or components
Other restrictions set by the client
Lockdown of the client or staff
Lack of new orders
Postponing ongoing projects
Cancellation of projects
Lack of staff because of the quarantee
Clients are not paying their bills
Restrictions to travel
2.4.2020 9.4.2020 28.4.2020
Share of firms which answered that challenge has moderate or strong effect to the business.
In CE sector the lack of new orders is growing challenge:
39 % of firms say it has moderate or strong implications to the business already.
To the SME’s the lack of new orders has hit even stronger
114.5.2020 Teknologiateollisuus
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%
Lack of materials or components
Other restrictions set by the client
Lockdown of the client or staff
Lack of new orders
Postponing ongoing projects
Cancellation of projects
Lack of staff because of the quarantee
Clients are not paying their bills
Restrictions to travel
2.4.2020 9.4.2020 28.4.2020
Share of firms which answered that challenge has moderate or strong effect to the business.
Immediate hit was in the retail and hospitality sectors.
Disruption has already spread to the manufacturing
industries, forest and chemicals, automotive and aviation,
but full effects have yet to filter through.
In the CE and construction sectors situation is expected
to worsen rapidly, hitting the bottom by the end of the
2020.
124.5.2020 Teknologiateollisuus
New orders from technology industries* firms in Finland
134.5.2020 TeknologiateollisuusSource: Technology Industries of Finland, order stock survey, January – March 2020
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
Total
Exports
Domestic
Milloin euros
Period: I/2020 / I,2019 I,2020 / IV,2019
Exports: -13 % -29 %
Domestic: -11 % -2 %
Total change: -12 % -24 %
*) Excl. metallurgy, gaming industry, software firms and data centres
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
SKOL tilauskantatiedustelu 2/2020
Housing construction:
Order stock -36 % and new orders -54 % since last year
144.5.2020 Teknologiateollisuus
Suunnittelu- ja konsultointialan tilauskanta ja muutokset toimialoittain
Vertailu vuoden takaiseen
Talo, muutos % -36 -29 -36 -56 -33 -54
Teollisuus, muutos % -48 -51 -49 -35 16 -23
Infra, muutos % 1 22 2 24 -6 24
Yhteensä, muutos % -1 22 -23 -23 10 -19
Tilauskanta:
kotimaa M€
Tilauskanta:
vienti M€
Tilauskanta:
yhteensä M€
Saadut
uudet
tilaukset:
kotimaa M€
Saadut
uudet
tilaukset:
vienti M€
Saadut
uudet
tilaukset:
yhteensä M€
TILAUSKANTATIEDUSTELU 2/2020
154.5.2020 Teknologiateollisuus
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
Very bad Bad Normal Good Very good
2.4.2020 9.4.2020 28.4.2020
Lähde: Teknologiateollisuus ry:n koronapulssi –jäsenkyselyt2.4.2020 n=70, 9.4.2020 n=73, 28.4.2020 n=78.
21 % of the CE firms find overall market either
bad or very bad NOW
164.5.2020 Teknologiateollisuus
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
Very bad Bad Normal Good Very good
2.4.2020 9.4.2020 28.4.2020
Lähde: Teknologiateollisuus ry:n koronapulssi –jäsenkyselyt2.4.2020 n=70, 9.4.2020 n=73, 28.4.2020 n=78.
32 % of the CE firms find overall market either
bad or very bad in COMING 1 MONTH
174.5.2020 Teknologiateollisuus
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
Very bad Bad Normal Good Very good
2.4.2020 9.4.2020 28.4.2020
Lähde: Teknologiateollisuus ry:n koronapulssi –jäsenkyselyt2.4.2020 n=70, 9.4.2020 n=73, 28.4.2020 n=78.
48 % of the CE firms find overall market either
bad or very bad in COMING 3 MONTHS
Employment weakens rapidly in service
industries as projects are completed and
lack of new orders.
184.5.2020 Teknologiateollisuus
194.5.2020 Teknologiateollisuus
• Almost 90 CE and architectural firms have started a process to
temporarely lay off staff. Over 10 000 technical designers and
4300 other consultants – app. 18 % of the staff are
temporarily laid off. (Situation 14.4.2020)
• In construction over 13 000 persons and in real estate sector
(mainly maintenance) over 24 000 persons are temporarily
unemployed.
• Total number of temporarily laid off in Finland is over 140 000.
– Increase 6 000 per day
There are over 10 000 temporarily laid off
engineers and architects
204.5.2020 Teknologiateollisuus
17,9 %
26,9 %
55,1 %
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
We have already made temporaylayoffs
We will have temporary layoffs within3 months
Temporary layoffs are not needed
Electronics and electrotechnical industry Mechanical engineering
Metals industry Information technology
Consulting engineering
Lähde: Teknologiateollisuus ry:n koronapulssi –jäsenkysely28.4.2020 Elektroniikka- ja sähköteollisuus n=85, kone- ja metallituoteteollisuus n=386, metallien jalostus n=23, tietotekniikka-ala n=68, suunnittelu ja konsultointi n=78.
45 % of the CE firms will have temporary
layoffs within 3 months
GOOD NEWS:
Major permanent layoffs are not expected
214.5.2020 Teknologiateollisuus
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
We have already made temporaylayoffs
We will have temporary layoffs within3 months
Temporary layoffs are not needed
Electronics and electrotechnical industry Mechanical engineering
Metals industry Information technology
Consulting engineering
Lähde: Teknologiateollisuus ry:n koronapulssi –jäsenkysely28.4.2020 Elektroniikka- ja sähköteollisuus n=85, kone- ja metallituoteteollisuus n=386, metallien jalostus n=23, tietotekniikka-ala n=68, suunnittelu ja konsultointi n=78.
Current COVID-19 restrictions in Finland
and exit-strategy
224.5.2020 Teknologiateollisuus
234.5.2020
• Openings from the 14th May onwards
– Pre and elementary schools will be opened with special arrangements
• Openings from the 1st June onwards
– Meetings/ gatherings up to 50 persons are allowed
– Restaurants will be re-opened gradually
– Sports events, competitions and training sessions are allowed
– Museums, theatres, libraries will be opened
• Ongoing restrictions
– Travelling abroad (does not apply to inland borders when travelling to work)
– High schools, universities, indoor sports venues, etc. will stay closed
– Gatherings over 500 persons until 31.7.2020
• Ongoing recommendations
– Working from home
– Avoid visiting elderly persons over 70 years
Finland has switched to hybrid strategy and is
gradually re-opening the society
244.5.2020 Teknologiateollisuus
• Temporary amendments to labour laws
– Shorter notice times, CE personnel so called “5+5+5 days” –rule
– Changes to annual holiday season
– Number of detailed exceptions
• Financial aid to firms
– Substantial aid packages to for example SME’s and to RDI activities.
– Pressure is growing towards general aid for service sectors
• Recommendations for contractual interpretations
– Application of Force majeure -conditions
– Notice and reclamation periods
Support to business
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