Business tendency survey for manufacturing, mining and quarrying, Q1 2004

The Business Tendency Survey points towards a rise in output and capacity utilisation throughout the first quarter of 2004. A range of industries contributes to this development. The total rate of employment continues to fall, but there are signs that this will level out. For the first time since the first quarter of 1998 a majority of managers in manufacturing industries report a combination of rising prices and an increase in new orders in the export market. Home market prices are considered stable, but there are signs of growth in new orders. Average capacity utilisation remains about 78 per cent by the end of the first quarter. Fewer managers report that a lack of demand in the export market is a limiting factor for production, while an increasing number report of stronger competition in the home market.

The general outlook in the short run (Q2 2004) is considered positive. This view is supported by expectations of a further increase in output, capacity utilisation and new orders. The industrial confidence indicator¹ has reached its highest level since the fourth quarter of 2000. For international comparisons of results for this indicator we refer to EUROSTAT and The Swedish National Institute of Economic Research .

Intermediate goods: Positive developments in export prices

Sectors producing intermediate goods (pulp, paper and paper products, the chemical industry, basic metals and others) report of improved conditions throughout the first quarter of 2004. Output and capacity utilisation appear to be growing, and the decline in employment seems to level out. There is a positive development in market prices and orders received. The situation seems to be particularly favourable for manufacturers in the export market. This view is supported by a significant drop in the number of managers that point to lack of demand in the export market as a factor that limits production. Average capacity utilisation increased to about 80 per cent. An increase in the number of managers who report of full capacity utilisation has resulted in the indicator of resource shortage reaching its highest level since the second quarter of 2001.

The general outlook for the short run is positive, and there are signs of growing investment. These results are supported by expectations of further growth in output and new orders.

Capital goods: Growth in new orders from the home market

Following a period characterised by lack of orders and redundancies, manufacturers of capital goods (metal products, machinery and equipment, offshore-related activity and others) report an increase in output and capacity utilisation. The negative development in employment seems to have stopped. The total stock of orders is increasing as a result of an increase in new orders from the home market, but there are no signs of improvement in market prices. Average capacity utilisation is close to 79 per cent. The number of working months covered by the current stock of orders has increased.

The general outlook in the short run is more optimistic than in the previous survey. This change of mood is supported by expectations of an increase in production volume, capacity utilisation and new orders in the forthcoming quarter.

Consumer goods: Positive development in the export market

Sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) report increasing demand and higher prices in the export market. The weakening of the NOK is a possible explanation for this positive development. There are signs of an increase in production, capacity utilisation and total stock of orders, but this does not seem to have an effect on employment.

Many managers consider the general outlook in the short run to be positive, and expect an increase in production and demand in the second quarter of 2004.

¹The industrial confidence indicator and links to international comparisons are described in the press release Q3 2003.