Business tendency survey for manufacturing, mining and quarrying, Q2 2001

For the manufacturing industry as whole the 2. quarter is valued positively, with rise in production and stable demand in the Norwegian market. The overall price level has increased, while export prices have declined. Tougher competition within some export industries may be some of the explanation for the reduced price level. With lower export prices, it looks like Norwegian producers have lost market shares, since a decline in demand from the export market is reported.

As a whole the general outlooks for the 3. quarter are valued as positive, but the pertinent indicator has declined somewhat compared with results from the previous quarter. The number of working months covered by the current stock of orders, is still on a relative high level, and is held up by long-term contracts in the offshore-related activity.

Intermediate goods

Sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals and others) have had a positive development in the level of production in the 2. quarter, but quite a few of the manufacturing leaders in these sectors report reduction in new orders received from export markets. Increased competition from export markets is reported as a limitation for production, and particularly in the EU market. Many of the leaders report reduction in the level of export prices. There are, however, fewer reports of capacity problems.

Capacity utilisation is now 82 per cent, which is an increase compared with the previous quarter. In many of these sectors lower stocks of orders than normal for exports are received.

The general outlooks for the 3. quarter are judged as about the same as in the previous quarter. This is substantiated by expectations of further reduction in the level of export prices, and at the same time some growth in production. Fewer leaders judge a rise in production next quarter as most likely compared with reports from the previous quarter.

Capital goods

Sectors producing capital goods (metal products, machinery and equipment, offshore-related activity and others) have increased the level of production in the 2. quarter. An increase in employment and capacity utilisation, now 82 per cent, has occurred. The total stock of orders has increased, but fewer of the manufacturing leaders report this kind of increase. Lack of qualified labour has become a considerable problem. 22 per cent reports that this was a limiting factor for production in the 2. quarter. This is particularly the case for the offshore-related industries.

The general outlooks for the coming quarter are valued by many of the leaders as better than the 2. quarter. Production is expected to rise together with employment and new orders received. The level of prices in the Norwegian market is expected to rise, while export prices are expected to remain stable. Lack of labour is considered to be a substantial problem as for limiting production also for the 3. quarter.

Consumer goods

In the 2. quarter production was about unchanged for sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others). Further, there are reports of reduced employment, stable level of new orders received and increased price level both in the home and the export markets in the 2. quarter.

Supply of raw materials is still a problem for certain sectors, and it is expected that this will contribute to limit production for these industries in the 3. quarter as well. Competition and/or demand in the Norwegian market are still the main limiting factors for production as a whole for the sectors producing consumer goods.

For the 3. quarter the general outlooks are valued to be slightly better, and a moderate growth in production and demand is expected. A further reduction in employment is expected within these sectors. Many of the manufacturing leaders in these industries expect a rise in the level of prices both in the home and the export market.