Business tendency survey for manufacturing, mining and quarrying, Q4 2001

Results from the fourth quarter show that the manufacturing leaders, as a whole, believe in a continuation of the negative trend we have witnessed through the first tree quarters of 2001. It is especially traditional export industries (pulp and paper, chemical industry and basic metals) that contribute to drag the overall picture down. Increased competition and low export prices led to reduced level of production and employment for the manufacturing industry as a whole. Capacity utilisation for the manufacturing industry is about 79 per cent. Many of the manufacturing leaders report reduced level of new orders received, and especially from the export market. There is also reported a reduction in the total stock of orders for the fourth quarter.

The manufacturing leaders' assessments of the first quarter 2002 show a conservative optimism. Increases in output and capacity utilisation are expected. The general outlooks for the forthcoming quarter are valued as positive, and more leaders than in the third quarter expect an improvement. An increase in new orders received form the home market is expected. The level of prices in the export markets is expected to drop further, and an increase in the number of leaders report that lack of demand and hardened competition will limit production.

There are some indications of increased optimism in the long-term views, where a greater number of leaders than the previous quarter believe in a rise in production and in the level of prices both in the home and export markets.

Intermediate goods: Low export prices

Sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals and others) still show weak development. Reduced levels of production and capacity utilisation are reported for the fourth quarter. A great number of leaders are reporting a low level of new orders received both from the home and the export markets. It is further reported that the level of prices is reduced, and especially in the export markets. Many leaders point out lack of demand and increased competition as a limiting factor for the level of production. These industries are important sectors for the aggregated assessments for the manufacturing industries as a whole, and are the main reasons for the negative development in the manufacturing industry.

The general outlooks for the first quarter 2002 are valued as slightly positive. A rise in production and a stable level of new orders received are expected, but a further reduction in the level of export prices in the first quarter is anticipated. It is further expected that the level of home market prices will drop. A great number of leaders are considering a reduction in the planned gross capital investments for the enterprise.

Capital goods: Increased capacity utilisation

Sectors producing capital goods (metal products, machinery and equipment, offshore-related activity and others) still show many positive signs. There is a high degree of capacity utilisation for the industries producing capital goods, about 85 per cent, and an increase in output as well as in employment in the fourth quarter. A lack of qualified labour is still assessed as a limitation of production, but fewer than in the third quarter value this as a problem. Level of new orders received is still positive, while there are reports of a reduction in new orders received for export markets. Further, the total stock of orders is reduced.

The general outlooks for the coming quarter are valued by many of the leaders as better than for the fourth quarter. Production is expected to rise and employment is believed to be stable for the first quarter 2002. The level of prices in home markets is expected to rise, while the level of export prices is anticipated to decline further. The manufacturing leaders for these industries expect an increase in the level of new orders received, both from the home and export markets in the forthcoming quarter.

Consumer goods: Reduced production

Sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) are reporting a reduction in both production and employment for the fourth quarter. Capacity utilisation is about unchanged at 76 per cent. Further, there are reports of a rise in the price levels for home and export markets. 22 per cent of the leaders in these industries point to increased competition in the home markets as a limitation for production for the fourth quarter.

An increasing number of the leaders within these industries are positive in the judgement of the general outlooks for the forthcoming quarter. This is substantiated by expectations of rise in production and new orders received in the first quarter 2002. There are also positive expectations connected with the level of prices in the home and export markets.