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This is an archived release.
Business improving, but great variations
The results of the Business Tendency Survey show signs of improvement in the manufacturing industry, but there seems to be a great deal of variation between the sectors.
According to the Business Tendency Survey, the manufacturing industry experienced growth in output and capacity utilisation in the third quarter. The decline in employment seems to be levelling off, a result that is underpinned by the fact that an increasing number of managers say that lack of qualified labour limits production. Market prices and orders continue to rise, and the number of businesses with high capacity utilisation is increasing. Average capacity utilisation is estimated at about 80 per cent.
The general outlook in the short run (Q4 2004) is considered to be positive. The figure is more or less unchanged from the previous survey. The industrial confidence indicator1 signals a further rise in output. For international comparisons on this indicator, go to EUROSTAT and The Swedish National Institute of Economic Research .
Intermediate goods: Possible increase in the rate of employment
The outlook for sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals and others) is good. A large number of managers report of growth in output and capacity utilisation, and for the first time since 1998 there are signs of increasing employment. The total stock of orders is higher than in the second quarter. Market prices continue to rise both at home and in the export market. An increasing number of managers point at lack of capacity as a factor that limits production. This result is supported by an increase in the number businesses that report of full capacity utilisation. Average capacity utilisation is considered at about 83 per cent.
The general outlook in the short run is seen as positive by many managers. Further growth in output, capacity utilisation, market prices and new orders is expected.
Capital goods: Few changes
The Business Tendency Survey shows few signs of recovery for sectors producing capital goods (metal products, machinery and equipment, offshore-related activity and others). An increasing number of managers report of growth in the total stock of orders, but so far this seems to have little impact on output, capacity utilisation and employment. A possible explanation for this is the time lag between contract dates and production dates. Market prices continue to fall.
An increasing number of managers consider the general outlook in the short run to be positive. In the fourth quarter, further growth in output and capacity utilisation is expected. In addition, home market prices are expected to stabilise.
Consumer goods: Positive development in prices
Sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) experienced an increase in output and capacity utilisation in the third quarter. The growth in new orders from the export market seems to have come to a halt, but rising demand from the home market means that the total stock of orders is higher than it was in the second quarter. In addition, market prices are increasing both at home and abroad.
The general outlook in the short run is considered to be positive, although fewer managers share this opinion.
| Assessment of industries in Q3 and the short-term outlook |
| Industry | Prospects | Background | |||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Food products, beverages and tobacco | + | Increase in output and capacity utilisation. Reduced level of employment. The managers report a positive development in the level of prices in the home and export market. Many managers judge the general outlook for Q4 as positive. There are positive expectations for the development in the level of production and demand. | |||||||||||||||||||||||||||||||||||||
| Wood and products of wood | ++ | High level of activity in Q3 - many managers report an increase in output, capacity utilisation and employment. Prices in the home market have increased, while the export prices remain stable. Fewer managers point at lack of demand as a limiting factor for production. The general outlook is better, and a further rise in output is expected for Q4. | |||||||||||||||||||||||||||||||||||||
| Pulp, paper and paper products | + | Many managers report a rise in output and capacity utilisation. The number of enterprises operating at full capacity has increased sharply in Q3. The general outlook is considered better, and the level of production and new orders from the export market are expected to increase in Q4. Prices in the export market are expected to be somewhat lower. | |||||||||||||||||||||||||||||||||||||
| Basic chemicals | ++ | Growth in output, capacity utilisation and new orders. Reduced employment. Positive development in the level of prices. Fewer managers point at lack of demand as a limiting factor for production. Many managers judge the general outlook as better, and further growth in output, capacity utilisation and demand are expected. Further increase in the level of prices is expected in Q4. | |||||||||||||||||||||||||||||||||||||
| Basic metals, non-ferrous | ++ | Increase in new orders, prices, production, capacity utilisation and employment. Many managers consider the general outlook as better. This view is supported by expectations of further increase in output, new orders and prices. | |||||||||||||||||||||||||||||||||||||
| Engineering, total | +(-) | On the whole, the engineering industries show higher levels of production and total stock of orders. The level of employment is more or less unchanged in Q3, and the level of prices is lower. The general outlook for Q4 is considered better. This view is supported by expectations of further increases in the level of output and stock of orders. Home market prices are expected to remain unchanged, while export prices are expected decrease. | |||||||||||||||||||||||||||||||||||||
| Metal products | ++ | Still positive development with increased level of production, capacity utilisation and employment. Many managers report a growth in new orders. Export prices are unchanged, while home market prices have increased. The general outlook for the forthcoming quarter is judged as better, and the positive development in output, employment and new orders are expected to continue. | |||||||||||||||||||||||||||||||||||||
| Machinery and equipment | + | Growth in output and capacity utilisation. Many managers report an increase in home market prices. The number of enterprices operating at full capacity has increased in Q3, and the stock of orders is higher. Further increases in production and new orders are expected, and the general outlook is positive. | |||||||||||||||||||||||||||||||||||||
| Electrical and optical equipment | +(-) | Increased level of production and stock of orders. Negative development in export prices, while prices in the home market are more or less unchanged. Decrease in new orders in Q3, but increase is expected in the forthcoming quarter. The general outlook is considered better, and growth in output and employment are expected. Further decrease in export prices is expected. | |||||||||||||||||||||||||||||||||||||
| Offshore-related activity incl. transport industry included | -(+) | Higher level of production. More or less unchanged stock of orders. Reduced employment and prices. General outlook for Q4 is considered to be worse. An increase in new orders from the export market is expected, while employment and prices are expected to fall. | |||||||||||||||||||||||||||||||||||||
| In the column for Prospects a total evaluation of the present situation and expected short-term developments is marked with the symbols + and -. The following codes and constellations are used: |
++
+ ~ - -- -(+) +/- |
Very good
Good Stable Weak Quite weak Weak, but with certain positive indications A situation where the + and - factors even out. |
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1The industrial confidence indicator and links to international comparisons are described in the press release Q3 2003.
Additional information
The statistics provide current data on the business cycle for manufacturing, mining and quarrying by collecting business leaders’ assessments of the economic situation and the short term outlook.
Contact
-
Edvard Andreassen
E-mail: edvard.andreassen@ssb.no
tel.: (+47) 40 90 23 32
-
Ståle Mæland
E-mail: stale.maeland@ssb.no
tel.: (+47) 95 05 98 88