Business tendency survey for manufacturing, mining and quarrying, Q4 2003

Results from the Business Tendency Survey indicate a moderate decline in output and capacity utilisation throughout the fourth quarter, but the trend points towards a levelling off the business cycle. For the time being there is no sign of an early recovery in the total rate of employment. Total stock of orders and market prices are more or less unchanged from the previous survey. Average capacity utilisation remains about 78 per cent.

Lack of demand and fierce competition are still considered as the major factors limiting production, but fewer leaders point at strong competition in EU-markets.

The general outlook in the short run (Q1 2004) is considered positive, and a growing number of managers say they consider an increase in gross capital investments. A significant drop in Norwegian interest rates might explain the growing desire to invest. The industrial confidence indicator signals a rise in output throughout the first quarter of 2004. For international comparisons of results for this indicator we refer to EUROSTAT (EU) and The Swedish National Institute of Economic Research (Sweden) on the Internet.

The business tendency survey indicates no change in home market prices throughout the first quarter, while export prises are expected to drop.

Intermediate goods: Growth in total stock of orders

Sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals and others) report a decline in output, but the supply of new orders seems to stabilise. Total stock of orders rose for the first time since the first quarter of 2001, and prices are up compared with the previous survey. There are clear indications of further reduction in the rate of employment, but huge investments in new production facilities - within certain big companies - should allow a rise in output of intermediate goods without increasing the number of employees. The general outlook in the short run is considered positive. The industrial confidence indicator for intermediate goods (seasonally adjusted) supports this view.

Capital goods: Growth in total stock of orders

2003 was a difficult year for producers of capital goods (metal products, machinery and equipment, offshore-related activity and others), and the fourth quarter was no exception. Output and capacity utilisation are considered to be falling, but a growing number of managers are of the opposite opinion. Nevertheless, there is still some way to go before the situation have stabilised. Total stock of orders grew for the first time in 7 quarters. Fewer respondents point at lack of demand from export markets as a factor that limits production and competition in EU markets seems to have eased a little. Average capacity utilisation is now about 77 per cent.

The general outlook in the short run is considered neutral. This view is supported by expectations of a stabililisation in output and new orders received throughout the first quarter of 2004.

Consumer goods: Growing demand from the home market

Sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) report a moderate decline in output and capacity utilisation. This result stands in sharp contrast to the positive signals recorded in the previous survey. There has been a moderate increase in new orders from the home market, and fewer leaders point at weak demand as a factor that limits production.

The general outlook is considered positive. Rising demand and rising home market prices are expected. Export prices are not expected to change.