Business tendency survey for manufacturing, mining and quarrying, Q3 2002

According to the Business Tendency Survey conditions for the manufacturing industry worsened from the second to the third quarter of 2002. The manufacturing leaders report of a decline in output, and the overall employment rate continues to fall. Average capacity utilisation remains more or less unchanged at about 79 per cent. Lack of qualified labour is no longer considered to be a vital factor in limiting production. New orders received from the home market show a significant decline compared with the previous survey, while total demands from the export market continue to be weak. An increasing number of leaders are of the opinion that stronger competition within the EU-market limits production. Low prices, mostly due to the strong Norwegian currency, are still considered to create a major problem for the export industry.

General outlooks for the forthcoming quarter are considered to be negative. There are expectations of a decline in overall production and capacity utilisation, and a growing number of leaders value increased competition in the EU-market as a factor that limits production. Plans for gross capital investments and future employment are adjusted downward. More leaders expect shortage of demand and reduced prices from the export market, and fewer believe in improved export prices in the medium run.

Intermediate goods: Growing pessimism in the short run

Sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals and others) report of stable development in output and capacity utilisation. The overall employment rate continues to stagnate. An increasing number of leaders are of the opinion that lack of excess capacity limits production, while fewer consider growing competition in the home market to be a problem. Falling demand from the home market is more or less levelled out by a moderate increase in new orders from the export market.

General outlooks are considered to be worse. This is mainly due to the prospect of weak development in export prices in the short and medium run.

Capital goods: Falling demand and lower prices

Sectors producing capital goods (metal products, machinery and equipment, offshore-related activity and others) report of declining output and capacity utilisation. The overall employment rate shows signs of stagnation, and fewer leaders consider lack of qualified labour to be a vital factor for limiting production. New orders received from the home market are down compared with results recorded in the previous survey, and total demand from the export market continues to be weak.

Many leaders consider general outlooks to be negative. In addition to prospects of failing demand and low prices they expect the possibility of a reduction in output, capacity utilisation and employment. Four out of five leaders report that weak demand and growing competition limit production. Prices are expected to continue to fall in the medium run.

Consumer goods: Minor changes from the previous survey

Sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) report of stable output and growing capacity utilisation compared with results recorded in the previous survey. Total stock of orders remains more or less unchanged, but an increasing number of leaders point at growing competition in the home market as a limiting factor for production. Low prices are still considered to be a major problem for the export industry.

General outlooks are considered to be slightly positive in the short run, and the results are more or less unchanged from the previous survey. An increasing number of leaders expect a rise in production in the medium run.