Business tendency survey for manufacturing, mining and quarrying, Q1 2002

Results from the first quarter indicate an improvement from the negative trend observed throughout last year. Sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) contribute to brighten the overall picture. The manufacturing leaders report increased production and growing capacity utilisation, while the downturn in employment seems to be levelling out. The capacity utilisation for the manufacturing industry has risen to about 80 per cent. The manufacturing leaders report a decline in new orders received from the export market, together with increased competition and reduced level of prices. Particularly a lot of the leaders report a reduction in export prices. This decline can to a certain extent be explained by the strong Norwegian currency.

The manufacturing leaders' assessments of the second quarter 2002 are positive. A greater number of leaders claim to be expecting improved conditions for their industry. This optimism is supported by expectations of growth in production and new orders. There is no sign of recovery of export prices.

There are still optimistic views for the long-term views. A greater number of leaders than the previous quarter anticipate an increase in output. Expected development in the level of prices is positive, but fewer leaders share this opinion.

Intermediate goods: Signs of stabilisation

Sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals and others) report that the reduction in output is stabilising. The average capacity utilization is about 80 per cent. Fewer leaders report reduction in the total stock of orders, but the level of prices was still falling both in the home and export market. Shortage in demand together with increased competition in the export market is reported to limit production.

The general outlooks for the second quarter 2002 are positive. A rise in production and an increase in new orders received are expected. An increasing number of the leaders expect a rise in the level of prices in the long-term views.

Capital goods: Reduced level of prices

Sectors producing capital goods (metal products, machinery and equipment, offshore-related activity and others) still show growth in production and employment. Capacity utilization is about unchanged at 85 per cent. Fewer leaders point out lack of qualified labour as limiting for production. New orders received from the home market show a moderate growth, while orders received from the export market are decreasing.

The general outlooks for the coming quarter are still valued as positive, but fewer of the leaders share this view. There are expectations of reduced employment together with lower level of prices both in the export and home market.

Consumer goods: Increased production

Sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) are reporting an increase in both production and capacity utilisation in the first quarter. Average capacity utilisation rose to about 76 per cent. There are reports of improvement in the home market, both in the level of prices and in new orders received. The export market, however, shows negative signs for these indicators. A greater number of leaders than in the previous quarter point out increased competition as limiting for production.

The leaders within these industries are positive in the judgment of the general outlooks for the forthcoming quarter. This is substantiated by expectations of rise in production and new orders received together with positive expectations regarding the development of the level of prices in the home market.

Alteration of series aggregated by main industrial groupings (intermediate goods, capital goods and consumer goods)

Some industries are classified under a new industrial group in order to establish accordance between Norwegian and European statistics. Most importantly - this applies to the industries printing (from intermediate goods to consumer goods) and production of weapons and ammunition (from intermediate goods to capital goods). The revision has small impact on the results.