Ukrainian Conflict Increases Uncertainty for Finnish Tech Firms

The Ukrainian conflict has dramatically increased both uncertainty and business risks for Finnish technology companies, according to a conducted by the Technology Industries of Finland on the impact of the crisis on the operation of export companies, with 580 tech firm CEOs as respondents.

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Since the conflict started, the survey said up to 85 percent of companies in the manufacturing sector reported a further weakening in the availability of raw materials. The main raw material in short supply is steel and its various grades, Petteri Rautaporras, chief economist of the organization, said.

According to the Confederation of Finnish Construction Industries, about a quarter of the steel used in Finland was previously from Russia, Ukraine and Belarus. Most of the respondents feared that the shortage could worsen in the coming months, with more production interruptions over time.

Meanwhile, a sharp increase in costs is affecting profits, with 53 percent of companies expecting to see profitability weaken year on year. Seventeen percent of respondents even said they would have to lay off or reduce their personnel.

Jaakko Hirvola, CEO of Technology Industries of Finland, called for quick action to boost investment licensing and export financing, adding that the conflict has made the investment environment more challenging.

The organization urged the government to abolish import duties on steel and provide more guidance on sanctions.

"It is necessary to abolish steel tariffs for certain grades where shortages threaten to paralyze the operations of companies," Matti Mannonen, executive director of innovation and economic policy at the organization, said, adding that the steel shortage affects companies in Finland and throughout Europe.