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For industry in general, output increased in the fourth quarter about as expected. The capital-goods-producing segments (machine industry, platform building, etc.) had the strongest growth. For last year as a whole, the output trend was weaker the first six months, but surged notably in the latter half of the year, particularly from the 2nd to the 3rd quarter.
Industrial output surged in the latter half of last year after a weak period the first six months. A high level of economic activity has made bottlenecks and pressure trends more noticeable.
Surge in demand
The upswing in 1997 was in part the result of clearly rising demand in the domestic market and in part that of growing demand and better prices for the traditional export industries (wood processing, metals and industrial chemicals). This trend is also confirmed by the decreasing portion of businesses reporting limited production due to demand and/or competition factors. In the fourth quarter, 43 per cent reported such problems - the lowest since the first quarter of 1980. In the strong recovery period in 1995, that percentage was 56 in the fourth quarter and more than 70 at the end of 1991.
The present boom has now lasted four years, assuming the recovery started as of the end of 1993. Throughout 1994 and into 1995 there was a substantial increase in industrial output, which for several reasons levelled off toward the end of the year. Export of traditional commodities had a setback due to falling prices in the international commodity markets. Demand in the domestic market was weak but recovered quickly nevertheless.
Although the powerful production boom has levelled off, bottlenecks and pressure trends in the economy have become increasingly prominent. This was evidenced by the increasing number of enterprises reporting shortages in labour and capacity.
Weekly Bulletin issue no. 5, 1998