The business tendency survey for the 4th quarter of 2024 shows that overall manufacturing production were unchanged, but there are large sector differences. Producers of Covers industries such as wood and wood products, paper and paper products, basic chemicals and basic metals. Often referred to as traditional export industries. report decrease in production, while producers of Covers industries such as food products and beverages, printing and reproduction, pharmaceuticals and furniture. report unchanged production. The producers of Covers industries such as machinery and equipment, ships, boats and oil platforms, repair and installation. Often referred to as the engineering industry. are still experiencing an increase in production.
After a period of about two years of relatively flat industrial production, production increased moderately through the 2nd and 3rd quarters of last year. The assessments from the manufacturing leaders now show that the production volume levelled off again in the 4th quarter. This development in production in recent years is also confirmed in the statistics Index of industrial production.
Behind the relatively flat development for manufacturing in recent years, there are thus sector-related differences. Producers of intermediate goods have reported a decline in output throughout this period, while producers of consumer goods have, after a decline in 2023, reported a levelling off in production from the 1st quarter of 2024. The majority of producers of capital goods have reported clear growth in recent years, but growth has slowed in the last couple of quarters. The growth in capital goods has been driven by high activity in the supplier industry, which can be linked to the high oil and gas investments. At the same time, the results for building of ships, boats and oil platforms show declining production growth in the 3rd quarter and unchanged production in the 4th quarter.
Industrial leaders report growth in total industrial employment in the 4th quarter. It is the producers of capital goods that are responsible for the growth. Producers of consumer goods and intermediate goods report unchanged employment.
Moderate decrease in total stock of orders
Overall, industrial leaders report that new orders from the domestic market are unchanged in the 4th quarter. Producers of intermediate goods report a decline in new orders from the domestic market, while the majority of producers of consumer goods report a moderate increase. For producers of capital goods, new orders from the domestic market are reported to be unchanged. There are also reports of unchanged new orders from the export market, overall. Producers of consumer goods and capital goods report a moderate increase, while producers of intermediate goods report a decrease in new orders from the export market.
Total stock of orders has decreased moderately in the 4th quarter compared to the previous quarter. Producers of intermediate goods report a fall in the total stock of orders, while producers of capital goods report a moderate increase. For consumer goods, the total stock of orders is reported to be unchanged.
Many industrial managers are reporting growth in the prices, both in domestic and export market for overall manufacturing in the 4th quarter. Price growth is reported within all the types of goods, but the growth is clearest for the producers of consumer goods. At the same time, far fewer people report price growth than in the period 2021 and 2022. This indicates that inflation has slowed through 2024, which is also confirmed by the statistics Producer price index.
A large number of manufacturing leaders report continued growth in The development in the prices that the company pays for the goods and services that are included in the production (product input), and on the prices of production equipment and facilities used in the production process. in the 4th quarter. It is the producers of consumer goods that have the clearest growth in cost prices. Since the rise in cost prices is more pronounced than for product prices, it is not surprising that there are reports of falling The development in the profitability of the company's sales of goods or services. Profitability means the change in the difference between current operating expenses and current operating revenues. in manufacturing in the 4th quarter.
Positive expectations for the 1st quarter of 2025
The general outlook for the 1st quarter of 2025 is positive for manufacturing. The producers of all types of goods are optimistic, but producers of capital goods are most positive about the coming quarter.
Manufacturing leaders expect higher production volumes and growth in average employment in the 1st quarter, compared with the 4th quarter. An increase in new orders is expected from both the domestic and export markets. The total stock of orders is also expected to increase in the 1st quarter.
It is still the producers of capital goods who report the best future prospects. They still expect continued clear growth in production and employment, and growth in new orders from both markets, and an increase in the total stock of orders.
The producers of intermediate goods and consumer goods report somewhat weaker future prospects. Both expect moderate growth in overall production and new orders from both markets, and growth in stock of total orders. For intermediate goods, employment is expected to increase moderately in the 1st quarter, while for producers of consumer goods, average employment is expected to be lower compared with the previous quarter.
It is also expected that cost prices and prices of products sold to both the domestic market and the export market will continue to increase in the 1st quarter.
Factors that limit investment
Manufacturing leaders report that investment plans remain unchanged for manufacturing as a whole. The proportion of manufacturing managers who believe that The prices of the investment goods (production equipment and facilities used in the production process) that the company purchases are so high that it limits the implementation of planned investments. and financing costs are limiting factors on investment is still relatively high
The industrial confidence indicator signals growth in the 4th quarter
This is the average of the responses (balances) to the questions on expected volume of production, total stock of orders and inventories of own products for sale (the latter with an inverted sign). See Definitions in ‘About the statistics’ for further details. in the 4th quarter of 2024 was 5.5 (Figures that are adjusted for calendar effects and seasonal variation. Such adjustment gives a more accurate picture of the underlying trend in the time series and makes it easier to compare the results of subsequent quarters.) which is up from 1,8 in the previous quarter. The indicator is now above the historical average of 2.9.
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 fromEurostat (EU), The Swedish National Institute of Economic Research and Statistics Denmark.
Access to qualified labor limits production
The proportion of industry leaders reporting that weak demand and strong competition limit is still relatively high, and has been fairly stable for the past two years. At the same time, historically speaking, there is still a high proportion of manufacturing managers who point out that a lack of qualified labor is a factor that contributed to limiting production in the 4th quarter. The sum of percentages for those who have reported that lack of qualified labour and raw materials/electric power limits production, plus the percentage of establishments with capacity utilisation above 95 per cent. which was very high in connection with the pandemic, has stabilized at lower levels in the past year.
The average How much of the available production capacity is utilised. A high capacity utilisation means that it is difficult to produce more without investing, while a low capacity utilisation means having capacity that is not being used. for Norwegian manufacturing was calculated to 78.8 per cent at the end of the 4th quarter. This is marginally higher than at the end of 3rd quarter. The capacity utilisation is still at a lower level than the historical average of 80.0 per cent. International comparisons of average capacity utilisation are available from Eurostat (EU).
Timelines
The survey data was collected in the period from 6 December 2024 to 14 January 2025.
