Positive signals from manufacturing

The business tendency survey for the second quarter of 2018 shows an increase in total production compared with the first quarter of 2018. Manufacturers of capital goods, intermediate goods and consumer goods report all of an increase in production in the second quarter of 2018.

The overall employment shows a moderate increase in the second quarter of 2018. Producer of intermediate goods reported employment growth while producers of consumer goods and capital goods reported a slight increase.

Increase in new orders in the second quarter

New orders from both domestic and export market, show an increase in the second quarter of 2018. The total stock of orders increased as well during the same period. New orders from the domestic market and the total stock of orders also show an increase during this period. New orders show an increase from both domestic and export market for all three different industrial groupings.

Prices went up for both export and domestic markets for the manufacturing industry in the second quarter of 2018. Producers of intermediate goods and consumer goods saw an increase in prices in both markets. Underlying factors for the rise in prices for these two industrial groupings were increased prices on basic metals and food products. For producers of capital goods, there were almost unchanged prices in the export market, while the domestic markets showed a slight increase.

Positive expectations for the third quarter in 2018

The general outlook for the third quarter of 2018 is clearly positive for the different industrial groupings. Industry leaders report that investment plans are adjusted upwards and employment is expected to increase. The total stock of orders is expected to increase as well.

The industrial confidence indicator for the second quarter of 2018 was 9.2 (seasonally-adjusted net figures), up from 6.8 in the previous quarter. This is fourth consecutive quarter where the indicator is positive and the indicator is well above the historical average. Values above zero indicate that total output will grow in the forthcoming quarter, while values below zero indicate that total output will fall. International comparisons of the industrial confidence indicator are available from Eurostat (EU), The Swedish National Institute of Economic Research and Statistics Denmark.

Capacity utilisation still below the historical average

The average capacity utilisation for Norwegian manufacturing shows an increase and was calculated to 78.8 per cent at the end of the second quarter of 2018, compared with 78.2 in the first quarter of 2018. This is below the historical average of 80.2 per cent. International comparisons of average capacity utilisation are available from Eurostat (EU).

The average number of working months covered by the current stock of orders was 4.0 in the second quarter of 2018. This is the same value as the previous quarter, and above the historical average for the indicator.

The resource shortage indicator went slightly up compared with the previous quarter. There is a slight increase in the number of leaders reporting that the lack of skilled labour and supply of raw materials or power was a limiting factor for production. There is a slight increase in number of leaders reporting full capacity utilisation. At the same time, as many business leaders as the last quarter, report that weak demand and strong competition are limiting factors for production for the second quarter of 2018.

Timelines

The survey data was collected in the period from 7 June to 19 July 2018.

Assessment of industries in Q2 2018 and the short-term outlook¹

 

More information:

Eurostat: Business survey – Confidence indicator by sector

Eurostat: Business survey – Capacity utilization

National Institute of Economic Research (Sweden) – Economic Tendency Survey

OECD: Main Economic Indicators