Business tendency survey for manufacturing, mining and quarrying, Q2 2005

According to the Business Tendency Survey, the manufacturing industry experienced growth in both output and capacity utilisation in the second quarter of 2005, but there is no indication of a rise in employment. The level of new orders from the home market is higher than in the first quarter of 2005, and there are indications of a rise in home market prices. Export prices, however, seem to be falling and the growth in new orders from the export market seems to be levelling out. A stronger Norwegian krone is a possible explanation for this development. The indicator measuring the number of working months covered by the current stock of orders is somewhat higher than the corresponding figure for 2004, and an increasing number of managers report that lack of capacity and shortage of qualified labour are factors that limit production. Fewer managers say that they experience difficulties related to lack of demand and fierce competition. The average capacity utilisation is estimated to be about 82 per cent.

The general outlook in the short term (Q3 2005) is considered to be better, but a decline in export prices is expected. A growing number of managers report that they are considering an increase in gross capital investments. This may lead to an increase in output in the long run. The industrial confidence indicator¹ is estimated to be 9 (net figure seasonally adjusted). This result indicates a rise in output in the third quarter of 2005. For international comparisons, go to EUROSTAT (EU) and The Swedish National Institute of Economic Research (Sweden).

Intermediate goods: Decline in export prices

The results from sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals and others) show clear indications of rising output, capacity utilisation and employment in the second quarter of 2005. The growth in new orders from the export market seems to be levelling out, and for the first time in nine quarters there are signs of a decline in export prices. Home market prices continue to grow. An increasing number of managers say that lack of capacity and shortage of qualified labour are factors that limit production. There is also a marked decline in the number of managers who report lack of demand from the home market. The average capacity utilisation is estimated to be about 85 per cent.

The general outlook in the short term is considered to be better, but fewer managers share this opinion. Export prices are expected to fall.

Capital goods: Considerable growth in new orders

The results from producers of capital goods (metal products, machinery and equipment, offshore-related activity and others) indicate growth in production, capacity utilisation and employment in the second quarter of 2005. A further increase in new orders from home and export markets seems to ensure stable growth in the total stock of orders. A rise in the number of working months covered by the current stock of orders supports this result. Fewer managers point at lack of demand and fierce competition as factors that limit production, while more point at lack of capacity and shortage of qualified labour. Average capacity utilisation is estimated to about 84 per cent.

The general outlook in the short term is considered to be better. Positive expectations for the development in output and home market prices support this view. A growing number of managers say that they are considering an increase in gross capital investments.

Consumer goods: Negative development in export prices

The results from sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) indicate a rise in output and capacity utilisation in the second quarter of 2005. A growing number of managers report falling demand in the export market, but this seems to be compensated by a positive development in the home market. There are indications of a possible decline in export prices, and the growth in home market prices seems to continue.

The general outlook in the short term is once again considered to be better. Expectations of a rise in output support this result. A growing number of managers are considering an increase in gross capital investments.

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