Understanding this divergence in the subcontracting and manufacturing specialization is increasingly important for industry leaders assessing capacity, competitiveness, and growth opportunities heading into 2026.
At Nordic Industries Development we visit major European trade-shows every month, speaking with manufacturers to help our clients grow and enter markets faster. The end of 2025 provided a unique opportunity to compare Finland and Sweden directly: two major Nordic subcontracting exhibitions, Alihankinta in Tampere and Elmia Subcontractor in Jönköping, took place in Q4.
Two days at each event offered not only a clear view of industry trends and coming winners and losers, but also an unmistakable sense of each country’s manufacturing momentum — or lack thereof.
What We Observed
Sweden: Slow to React, Especially in Defense
Sweden has not yet fully awakened to the surge in European defense-sector spending. This was apparent in the quiet halls of Elmia 2025: thin crowds, subdued activity, and little of the industrial energy visible in Tampere.
Many Swedish heavy-industry manufacturers confirmed that the market remains soft. Existing subcontracting agreements continue, but no major production uptake is expected before late 2026.
This slowdown reflects Sweden’s long-standing focus on light, precision, and high-tech manufacturing — AI, automotive, and aerospace — supported by mature supply chains and larger production series.
Finland, by contrast, lacks these sectors and has historically centred on heavy industry and small-series production.
Still, Sweden will remain attractive for suppliers of large, complex components, and especially for companies serving precision and light-manufacturing applications. Furthermore, Sweden is expected to expand marine and submarine manufacturing capabilities, creating supply opportunities for foreign partners once investments materialize.
Today, however, limited industrial activity means Sweden has little spare capacity — a fact highlighted by the number of Finnish subcontractors supplying heavy steel components and advanced assemblies to Sweden.
Finland: A Regional Split — and a Surge in the West
Finland presents a dual reality.
The eastern region — strong in process industries, forestry technologies, and machinery — is struggling. Output from small metal workshops has dropped sharply, and 2026 expectations remain weak.
The west, however, is booming. Electrification, marine technologies, power-generation equipment, and even steel production are driving capital expenditures. Despite Finland’s slow macro environment, companies in these segments continue to invest heavily in new machinery and automation.
CNC and robotics distributors reported a very strong 2025, with order books supported by expanding marine, energy, and electrification projects.
GDP Tells Us Little
Both countries remain at the bottom of Europe’s growth rankings. Finland is expected to grow only 0.5% in 2025, while Sweden targets 1.5% in 2025 and as much as 3.0% in 2026.
Yet GDP figures obscure the real issue: structural labour shortages. Both markets lack skilled machinists and operators, and Finland faces the additional challenge of costly logistics due to its geographic distance from central Europe.
This disadvantage, however, also shields Finnish manufacturers from lower-cost Eastern European competitors, who struggle with logistics costs for small-series deliveries into the Nordics.
The Cards Are Being Dealt
The subcontracting landscape in Scandinavia is being reshaped now.
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Precision and specialized machine builders will find strong opportunities as Sweden’s aviation and defense sectors begin upgrading capacity.
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Manufacturers able to deliver high-end, one-off, or small-series assemblies will benefit, particularly in Sweden.
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Finland’s distance from European competition — combined with its strong heavy-industry skills — makes it more challenging market to foreign subcontractors of semi-finished products or assemblies.
The divergence between the two markets is real, and it is accelerating. Understanding where capabilities, investments, and demand are shifting will be essential for suppliers planning their 2026–2028 strategies.
