Southwest Finland is moving from cautious recovery towards moderate growth in 2026. The region’s key strength lies in its diversified economic structure, with strong sectors including maritime industry, technology industry, pharmaceuticals, ICT, services, and a robust primary production base. Its logistical location, vibrant SME sector, and broad educational offering further support regional competitiveness. The situation and outlook of business and labour markets in Southwest Finland have been assessed in the spring Regional Development Outlook report.

Moderate growth in sight

Business barometers and regional forecasts indicate upward trends in turnover, profitability and employment, although investment decisions remain cautious due to global uncertainty. The strong increase in Finnvera financing and exceptionally high growth in R&D investments reflect companies’ long-term confidence in the region. In particular, collaboration between higher education institutions and businesses has accelerated innovation.

Overall, the outlook for Southwest Finland towards 2026 is cautiously positive, with clear economic growth drivers in place. Strong industries, investments and a solid knowledge base create conditions for sustainable growth, despite global geopolitical uncertainty. The prolonged Iran crisis casts a shadow especially over the region’s technology industry, which depends on stable export markets. Challenges remain in the construction sector and in labour market mismatches in certain fields.

Maritime and pharmaceutical industries support growth

The maritime industry stands out as a key growth driver. New luxury cruise ship orders, a strong existing order book, icebreaker projects, defence and authority vessel production, and an extensive subcontracting network generate significant employment and long-term growth.

In the automotive sector, Valmet Automotive’s strategic shift toward defence industry and electric vehicles opens new opportunities, although short-term adjustments have a strong impact on employment in the Vakka-Suomi area.

The pharmaceutical industry continues its stable, and in parts very strong, growth. Turku is strengthening its position as an internationally significant hub for drug development and production, with investments and research collaboration supporting long-term employment. In the ICT and retail sectors, development is more mixed: productivity improves, but some jobs are lost due to digitalisation and AI.

Construction sector remains weak

The construction sector continues to face a downturn. Public investments and large infrastructure projects sustain employment, although residential construction remains very subdued this year. In the longer term, population growth and migration gains are expected to support recovery.

Green transition projects are progressing step by step, but their implementation is constrained particularly by electricity transmission capacity limitations.

Unemployment remains high, labour shortages persist in some sectors

Unemployment remains elevated, particularly long-term and youth unemployment. At the same time, labour shortages persist in certain occupations, especially in the maritime industry, but also in ICT and healthcare.

The importance of international labour is increasing, and positive work permit decisions are particularly concentrated in growth sectors.

Additional information on regional outlooks

Regional Development Outlooks represent a joint assessment by regional vitality centres and other development actors on the current situation and near-term outlook of regions and subregions. The report is published twice a year and covers business activity, unemployment and its structure, as well as the availability of skilled labour. More information is available in publications by the KEHA Centre (doria.fi) and in the Ministry of Economic Affairs and Employment’s report.

Contact:
Timo Vahtonen
Labour Market Coordinator
timo.vahtonen@elinvoimakeskus.fi
Tel. +358 295 020 035
Employment and Immigration Unit