Business tendency survey for manufacturing, mining and quarrying, Q4 2000

The manufacturing industries short- term expectations are positive. The variable summarising the manufacturing industries' general judgement of the prospects for the next quarter shows a clear upswing through the year 2000, and a slight increase in the 4. quarter as well. The development reflects expectations of stable demands and a moderate growth in production in the 1. quarter.

Some manufacturing leaders point out that the planned tax that was aimed at the building sector would have influenced the demand for goods in a negative way. When the tax now is repealed, some expectancy indicators may have been underestimated.

The repeal of the subsidy to shipyards from 1. January 2001 has for some engineering sectors resulted in a higher increase in demand than normal.

Production and new orders

The development in the production for the manufacturing industries as a whole was somewhat higher than expected in the 4. quarter. The general impression is, however, to a certain extent distinguished by large sector differences.

Sectors producing intermediate goods have had a very good development with increases in production and demand. Capacity utilization is about 80 per cent nearly unchanged compared with the same quarter last year. New orders show a positive development, and export prices have clearly gone up.

Sectors producing capital goods (metal products, machinery and equipment, offshore-related activity and others) have had a weaker production development. The level of activity is clearly lower than what was reported at the same time in 1997-98. New orders received from home markets have increased. This is partly connected to the repeal of the subsidy of 9 per cent for building of new ships from 1. January 2001. The total stock of orders is estimated as high.

For sectors producing capital goods the production was about unchanged from the 3. to the 4. quarter, but demand from the export market was somewhat lower. The capacity utilization was about the same and is now about 77 per cent.

Bottlenecks in production

Lack of demand and/or increased competition remains the main bottleneck limiting the production in the manufacturing industry. 64 per cent of the manufacturing leaders point this out as a problem. 7 per cent view the lack of qualified labour as a bottleneck. This is the highest level since the 4. quarter 1998 and it may indicate that the pressure in the labour market is increasing. The plant capacity is valued as a limitation by 8 per cent of the leaders.

The manufacturing leaders value similar factors as the main limitations in production for the current quarter as well.

There are somewhat large sector differences concerning bottlenecks in production. For traditional export industries (pulp, paper and paper products, chemicals and chemical products and basic metals) the capacity of the plant is the main limitation. The leaders in the basic metal producing sector are especially pointing this out.