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This is an archived release.
Strong growth in manufacturing output
The industrial output continues to grow despite major bottlenecks in the manufacturing industry. A further rise in employment and improved capacity as a result of higher investments contribute to this development.
According to the business tendency survey, the Norwegian manufacturing industry experienced a further rise in total output in the third quarter of 2007 and the growth rate seems to be more or less the same as recorded in the previous survey. The level of new orders is still very high, but there are indications of weaker growth in demand and prices in export markets. A stronger Norwegian currency contributes to this development. The indicator for bottlenecks in the production1(see table 16 ) shows a slightly falling trend, but remains at a high level seen from a historical perspective. A high level of capacity utilisation and severe shortage of qualified labour is the main reason for this. The average number of working months covered by the current stock of orders show roughly the same level as recorded in the corresponding quarter of 2006, while the average capacity utilisation stays put at about 85 per cent. International comparisons of average capacity utilisation are available from EUROSTAT . A further rise in employment and improved capacity as a result of higher investments (see Quarterly Investments Statistics ) contribute to the increase in total output.
A large number of managers still consider the general short-term outlook (Q4 2007) to be better. Expectations of further growth in output and market prices support this result. The industrial confidence indicator2 continues to fall and is estimated to 10 (seasonally adjusted net figure). International comparisons of the industrial confidence indicator are available from EUROSTAT (EU) and The Swedish National Institute of Economic Research (Sweden).
Weaker growth in export prices
Sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals etc) experienced further growth in total output, but the growth rate is somewhat weaker than recorded in the second quarter. A similar pattern is recorded for new orders. The growth in home market prices still seems to be strong, but export prices show signs of levelling out. A stronger Norwegian currency contributes to this development. The number of managers who claim that lack of capacity and shortage of qualified labour limits production is somewhat higher than the corresponding figure for 2006. The average capacity utilisation is estimated to about 86 per cent, while the average number of working months covered by the current stock of orders is roughly at the same level as a year ago.
A clear majority of the managers still consider the general short-term outlook to be better. Expectations of further growth in new orders and market prices support this result. However, fewer managers claim that they expect further growth in export prices.
Ever higher output of capital goods
Sectors producing capital goods (metal products, machinery and equipment, offshore-related activity etc) experienced further growth in output despite lack of capacity and shortage of qualified labour. High growth in new orders causes total stocks of orders to rise, but the growth in export prices seems to be levelling out. The indicator of resource shortage still shows a very high result seen from a historical perspective. High capacity utilisation and severe shortage of qualified labour is the main reason for this. The average number of working months covered by the current stock of orders is significantly higher than in the corresponding period of 2006. Average capacity utilisation is estimated to about 91 per cent.
The number of managers who consider the general short-term outlook to be better is more or less the same as recorded in the previous survey, and the future prospects still seem to be good. A further rise in the number of respondents who claim that they are considering an increase in planned gross capital investments supports this view.
Continued strong demand for consumer goods in domestic markets
Sectors producing consumer goods (food industry, publishing, pharmaceutical industry etc) experienced growth in total output. Strong demand in domestic markets fuels this development. A decline in the number of managers who claim that weak demand in domestic markets limits production, supports this result. Market prices continue to rise in the third quarter, but export prices show weaker growth than recorded in the previous survey. Average capacity utilisation is estimated to about 80 per cent.
A majority consider the general short-term outlook to be better. Expectations of rising prices and higher demand in domestic markets support this result.
| Industry | Prospects | Background | |||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Food products, beverages and tobacco | ++ | Increases in output, capacity utilisation and employment. Increase in demand and rise in prises in the domestic market, while demand and prices from the export market are more or less unchanged. A number of managers judge the general outlook for Q4 as better, and further increases in the levels of production and capacity utilisation are expected in the forthcoming quarter. The positive development in prices and demand from the domestic market is expected to continue. | |||||||||||||||||||||||||||||||||||||
| Wood and products of wood | ++ | Growth in output and employment. The level of new orders from the domestic market is more or less unchanged, while the level of new orders from the export market has decreased. Prices continue to rise. The general outlook for Q4 is considered positive, and higher levels of production, employment and capacity utilisation are expected in the forthcoming quarter. | |||||||||||||||||||||||||||||||||||||
| Pulp, paper and paper products | +/- | Higher levels of production and capacity utilisation. Reduced employment and stock of orders. Rise in market prices, but fewer managers report growth in export prices compared with the previous quarter. The general outlook for Q4 is judged as better, and further growth in output and higher market prices is expected. New orders from the export market are expected to be lower in the forthcoming quarter. | |||||||||||||||||||||||||||||||||||||
| Basic chemicals | ++ | Growth in output and capacity utilisation. More or less unchanged level of employment. Rise in new orders from the domestic and export market and higher market prices. A growing number of managers report that they consider an increase in gross capital investments. Many managers consider the general outlook for Q4 as better, and the growth in output, new orders and prices is expected to continue in the forthcoming quarter. | |||||||||||||||||||||||||||||||||||||
| Basic metals, non-ferrous | - | Reduced levels of production and capacity utilisation. More or less unchanged level of employment. Total stock of orders has increased, while domestic and export market prices have fallen. The general outlook for Q4 is considered to be worse. Total stock of orders is expected to be more or less unchanged, while prices are expected to fall further. | |||||||||||||||||||||||||||||||||||||
| Engineering, total | ++ | Overall, the engineering industries report increased levels of production, capacity utilisation and employment. Rise in new orders from the domestic and export market. Domestic market prices have risen, while export prices are more or less unchanged. Lack of qualified labour and shortage of capacity limits production. Many managers consider the general outlook for the forthcoming quarter as better. Further increases in output, employment, new orders and prices are expected. | |||||||||||||||||||||||||||||||||||||
| Metal products | ++ | Continued positive development with increases in production, capacity utilisation and employment. Many managers report increases in new orders and the stock of orders. Positive development in domestic and export market prices. A number of managers cite shortage of capacity and lack of qualified labour as limiting factors for production. The general outlook is considered to be better, and further growth in output and new orders is expected in Q4. | |||||||||||||||||||||||||||||||||||||
| Machinery and equipment | ++ | Many managers report higher levels of production, capacity utilisation and employment. Rise in total stock of orders and domestic and export market prices. Lack of raw materials/electric power, qualified labour and shortage of capacity limits production. The general outlook for Q4 is positive. Higher levels of output, employment and new orders are expected in the forthcoming quarter. Prices are also expected to rise. | |||||||||||||||||||||||||||||||||||||
| Electrical and optical equipment | ++ | Increases in output, capacity utilisation and employment. Rise in new orders from the domestic and export market. Domestic market prices have increased, while export prices have fallen compared with Q2. Lack of qualified labour limits production. The general outlook is positive, and further growth in output, employment and new orders is expected in the forthcoming quarter. Export market prices are expected to fall further in Q4. | |||||||||||||||||||||||||||||||||||||
| Offshore-related activity incl. transport industry | ++ | Many managers report increases in output, capacity utilisation and employment. Total stock of orders has risen together with domestic market prices. Export prices are more or less unchanged. Lack of qualified labour limits production. The general outlook for Q4 is considered better, and higher levels of production, employment, new orders and prices are expected. | |||||||||||||||||||||||||||||||||||||
| The column for Prospects shows an overall evaluation of the present situation and expected short-term developments using the symbols + and -. The following codes and constellations are used: |
++
+ ~ - -- -(+) +/- |
Very good
Good Stable Weak Very weak Weak, but with certain positive indications A situation where the + and - factors even out. |
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1This indicator sums up response alternatives from the question related to factors limiting production in the current quarter and which relate to access to resources, together with the response distribution of full capacity utilisation.
2The industrial confidence indicator and links to international comparisons are described in the press release Q3 2003 (see Previous articles )
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