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Published:
This is an archived release.
Positive outlook for Q1
The average capacity utilisation of Norwegian manufacturing seems to be back at its normal level. The level of production is expected to grow in the first quarter of 2005.
According to the Business Tendency Survey, the manufacturing industry experienced further growth in output and capacity utilisation throughout the fourth quarter of 2004. A rise in new orders both at home and in export markets resulted in an increase in the total stock of orders. The decline in employment seems to have stopped, and home market prices continue to rise. Average capacity utilisation is estimated to about 80 per cent. In a historical perspective this must be characterised as normal. The number of managers who point at lack of capacity as a limiting factor for production has increased somewhat.
The general outlook in the short run (Q1 2005) is considered positive, and a growing number of managers say that they are considering an increase in gross capital investments. The industrial confidence indicator1 rose to 12 (net figure seasonally adjusted). This is a strong signal of further growth in output throughout the first quarter of 2005. For international comparisons, please go to EUROSTAT (EU) and The Swedish National Institute of Economic Research (Sweden).
Intermediate goods: High activity
Sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals and others) experienced a significant growth in output and capacity utilisation throughout the fourth quarter. Employment increased moderately, and a rise in new orders both at home and in the export market resulted in a growth in the total stock of orders. Home market prices continue to rise, while export prices seem to have stabilised at the current level. The average capacity utilisation was estimated to about 84 per cent at the end of the fourth quarter. This is the highest level recorded since the fourth quarter of 1995.
The general outlook in the short run is considered positive, and a growing number of managers say they consider an increase in gross capital investments.
Capital goods: Growth in new orders at home
Producers of capital goods (metal products, machinery and equipment, offshore-related activity and others) report of growth in output, capacity utilisation and employment. A rise in new orders from the home market seems to be the main reason for this development. Home market prices rose in the fourth quarter, but there is still no sign of improvement in export prices. Fewer managers point to fierce competition in the home market as a factor that limits production, while more point at lack of capacity.
A growing number of managers consider the general outlook in the short run as positive. This view is supported by a fall in the number of managers who consider the combined effect of fierce competition and lack of demand as a factor that limits production.
Consumer goods: Positive signals from home market
Sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) experienced further growth in output and capacity utilisation throughout the fourth quarter, but this seems to have had little effect on the fall in employment. The rise in demand from the export market seems to be levelling out, but an increase in demand from the home market causes the total stock of orders to rise. Market prices are up both at home and in the export market.
A growing number of managers consider the general outlook in the short as positive. This result is supported by expectations of a positive development in the home market.
| Assessment of industries in Q4 and the short-term outlook |
| Industry | Prospects | Background | |||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Food products, beverages and tobacco | + | Increase in output, capacity utilisation and level of prices. Reduced level of employment. Many managers consider the general outlook for Q1 to be better, and a further increase in production is expected. Demand is expected to increase both at home and in the export market. Export prices are expected to remain stable, while home market prices are expected to rise. | |||||||||||||||||||||||||||||||||||||
| Wood and products of wood | ++ | Many managers report an increase in the level of production, capacity utilisation and employment. There has been an increase in new orders from the home market, while new orders from the export marked have fallen. The general outlook for the forthcoming quarter is positive, and increases in output and new orders are expected in Q1. | |||||||||||||||||||||||||||||||||||||
| Pulp, paper and paper products | ++ | Many managers report a higher level of output and capacity utilisation. Increase in new orders from the home and export markets. Lower level of employment and prices in Q4. The general outlook for Q1 is positive. This view is supported by expectations of further increases in output and order stocks. Prices are expected to rise in Q1. | |||||||||||||||||||||||||||||||||||||
| Basic chemicals | + | Growth in new orders, production and prices in Q4. An increasing number of managers point to increasing competition in the export market as a limiting factor for production. The capacity utilisation is expected to rise in Q1, and there are signs of growing investments. The general outlook is considered better, although fewer managers share this view. Further growth in output is expected in Q1. | |||||||||||||||||||||||||||||||||||||
| Basic metals, non-ferrous | ++ | Many managers report a rise in output and new orders in Q4. An increasing number of managers point to lack of capacity as a limiting factor for production. Many managers consider increasing the level of investments. The general outlook is positive, and further increases in production and new orders are expected. The price level is expected to rise in Q1. | |||||||||||||||||||||||||||||||||||||
| Engineering, total | + | On the whole, the engineering industries show higher levels of production, capacity utilisation and employment in Q4. Both new orders from the home market and home market prices have increased. Export prices are reduced. The general outlook is considered better, and this view is supported by expectations of further increases in production and new orders in Q1. The level of employment is expected to remain stable. A further reduction in export prices is expected, while home market prices are expected to increase moderately. | |||||||||||||||||||||||||||||||||||||
| Metal products | ++ | Increased output, employment, stock of orders and capacity utilisation. Positive development in prices, both at home and in the export market in Q4. An increasing number of managers point to lack of qualified labour as a limiting factor for production, while fewer point to lack of demand. Many managers consider the general outlook for Q1 as better, and further increases in production, employment, new orders and prices are expected. | |||||||||||||||||||||||||||||||||||||
| Machinery and equipment | + | Positive development in the level of production, capacity utilisation and employment. Growth in new orders and home market prices. Export prices have fallen. The general outlook is considered better, and production and new orders are expected to rise. The level of employment is expected to be somewhat lower in Q1. | |||||||||||||||||||||||||||||||||||||
| Electrical and optical equipment | + | Many managers report a higher level of production and increased stock of orders. Increased employment and capacity utilisation. Home market prices have increased, but export prices have fallen. The general outlook is positive, and there are expectations of growth in output, new orders and employment. A moderate decline in prices is expected in Q1. | |||||||||||||||||||||||||||||||||||||
| Offshore-related activity incl. transport industry included | +(-) | Growth in output, capacity utilisation and employment. New orders from the home market have increased, while orders from the export market have fallen. The number of working months covered by the current stock of orders has increased. Prices have fallen. The general outlook for Q1 is positive. New orders from the export market are expected to increase, while output is expected to be somewhat lower. A further decline in prices is expected. | |||||||||||||||||||||||||||||||||||||
| 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. | |||||||||||||||||||||||||||||||||||||
1 The 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
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Ståle Mæland
E-mail: stale.maeland@ssb.no
tel.: (+47) 95 05 98 88