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Steady growth in total output
Norwegian industrial managers report of a further increase in total output. A high total stock of orders within industries producing ships, oil platforms and modules is an important reason for this development.
According to the business tendency survey, the Norwegian manufacturing industry experienced steady growth in total output in the second quarter. This is somewhat unexpected given the results from the previous survey, but more or less in line with the development recorded in the Index of production . A high total stock of orders within the engineering industries is an important reason for this development. The growth in employment shows signs of levelling out, but the total number of employees seems to be somewhat higher than in the first quarter of 2008. A moderate increase in new orders from the domestic market seems to compensate for a decline in new orders from the export markets. Market prices continue to grow. Higher costs due to rising prices on input factors such as oil, gas and steel etc. is probably a contributing factor.
The number of working months covered by the current stock of orders is somewhat lower than recorded in the corresponding quarter of 2007. Bottlenecks in the production still pose a major concern, but the conditions seem to be somewhat better than recorded in the previous survey (see, table 16 ). The average capacity utilisation in the Norwegian manufacturing industry is estimated to be 83,6 per cent. International comparisons of average capacity utilisation are available from EUROSTAT .
The general short-term outlook (Q3 2008) is considered to be positive, but fewer managers share this opinion. The industrial confidence indicator1 is estimated to 2 (seasonally adjusted net figure) in the second quarter. International comparisons of the industrial confidence indicator are available from EUROSTAT (EU) and the Swedish National Institute of Economic Research (Sweden).
A further decline in new orders
Sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals, etc) report of moderate growth in total output. However, the average rate of employment seems to drop. Market prices seem to grow in spite of a decline in new orders from home- and export markets. Higher costs due to a rise in prices on important input factors such as oil and gas is probably a contributing factor. The average capacity utilisation is estimated to be 83,3 per cent in the second quarter. The number of working months covered by the current stock of orders is significantly lower than in the corresponding quarter of 2007, and a growing number of managers point at weak demand as a factor that limits production.
The indicator covering the general short-term outlook moves from positive to neutral. Prospects of a reduction in employment and weaker demand from the domestic market support this result.
High stocks of new orders secures further growth in total output
Sectors producing capital goods (metal products, machinery and equipment, offshore-related activity, etc) experienced yet another quarter with strong growth in output and employment. The growth in new orders seems to be levelling out. However, market prices continued to rise in the second quarter. A considerable order mass to be executed (see, Statistics on new orders ) together with higher costs due to a rise in wages and the price on steel is a likely explanation for this result. The number of managers who point at lack of capacity as a factor that limits production is much lower than in the corresponding quarter of 2007, but shortage of qualified labour still seems to be a problem. Average capacity utilisation is estimated to be 88,7 per cent in the second quarter. The number of working months covered by the current stock of orders is more or less the same as recorded one year ago.
A majority of the industrial managers consider the general short-term outlook to be better. Prospects of a further rise in output and the average rate of employment support this result.
Strong growth in prices on consumer goods
Sectors producing consumer goods (food industry, publishing, pharmaceutical industry, etc) experienced a further increase in total output. Growing demand in the domestic market explains this result. Market prices continued to rise in both the domestic and export markets. A strong growth in prices of food products contributed to this development. Average capacity utilisation is estimated to 79,6 per cent in the second quarter.
A majority of the respondents consider the general short-term outlook to be better. Prospects of a further increase in demand, total output and market prices support this result.
1The industrial confidence indicator and links to international comparisons are described in the press release Q3 2003 (see Previous articles )
| Industry | Prospects | Background | |||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Food products, beverages and tobacco | ++ | Growth in output, capacity utilisation and employment. Increase in demand from the domestic market, while demand from the export market is more or less unchanged. Many managers report growth in domestic market prices. The general outlook for Q3 is considered as better, and further increases in output, demand and market prices are expected. | |||||||||||||||||||||||||||||||||||||
| Wood and products of wood | -- | General decline in the construction industry influence the producers of wood and wood products. Reduced levels of production, capacity utilisation and employment. Market prices and new orders are reduced. The general outlook for the forthcoming quarter is considered as worse. This view is supported by expectations of reduced output, employment and capacity utilisation. Market prices are also expected to decline. | |||||||||||||||||||||||||||||||||||||
| Pulp, paper and paper products | -(+) | Increases in output and capacity utilisation. Reduced level of employment. Increase in new orders from the domestic market and reduction from the export market. Export prices are more or less unchanged, while domestic market prices have declined. Managers point at weak demand from the export market and fierce competition as limiting factor for production. The general outlook is judged as positive, and output is expected to rise in Q3. | |||||||||||||||||||||||||||||||||||||
| Basic chemicals | + | Higher levels of production, capacity utilisation and employment. Increase in new orders from the domestic and export market. Increase in market prices. Shortage of capacity limits production. The general outlook for Q3 is considered as better. Further increases are expected in output, new orders and market prices. | |||||||||||||||||||||||||||||||||||||
| Basic metals, non-ferrous | - | Reduced output and capacity utilisation. More or less unchanged level of employment. Decline in new orders. Weak USD contributes to a lower export price in NOK. The general outlook for the forthcoming quarter is considered as worse. Nevertheless, production and export market prices are expected to rise. Further decline in the level of new orders is expected. | |||||||||||||||||||||||||||||||||||||
| Engineering, total | ++ | Overall, the engineering industries still have a positive development with increases in production, capacity utilisation and employment. Increase in new orders from the export market, while the level of new orders from the domestic market is more or less unchanged. Lack of qualified labour is a limiting factor for production. The general outlook for Q3 is judged as better, but fewer managers than in the previous quarter share this opinion. Output, capacity utilisation and employment are expected to rise in the forthcoming quarter. | |||||||||||||||||||||||||||||||||||||
| Metal products | + | Increases in production, capacity utilisation and employment. Rise in the level of new orders from the domestic market, while the level from the export market is reduced. Many managers still report that lack of qualified labour limits production. The general outlook for the forthcoming quarter is considered as worse. Output, employment and new orders from the export market are expected to remain more or less unchanged. The managers expect the total stock of orders to be reduced, and market prices to rise. | |||||||||||||||||||||||||||||||||||||
| Machinery and equipment | ++ | Many managers report higher levels of production, capacity utilisation and employment. Increase in new orders from the domestic and export market. Growth in market prices. Lack of qualified labour and raw materials, together with shortage of capacity limits production. The general outlook is considered as better, and further increases in output, employment, new orders and market prices are expected | |||||||||||||||||||||||||||||||||||||
| Electrical and optical equipment | ++ | Growth in output, capacity utilisation and employment in Q2. New orders from the domestic market are more or less unchanged, while the level of new orders from the export market has risen. Improved market prices. Lack of qualified labour limits production. The general outlook for Q3 is considered positive, but fewer managers share this opinion. Growth in the levels of production, employment and new orders are expected in the forthcoming quarter. | |||||||||||||||||||||||||||||||||||||
| Offshore-related activity incl. transport industry | + | More or less unchanged level of production. Increases in capacity utilisation and employment. The level of new orders is more or less unchanged, while the stock of orders is reduced. Many managers report that lack of qualified labour limits production. The general outlook for Q3 is judged as better, and output is expected to rise. There are also expectations of increases in employment, new orders and market prices. | |||||||||||||||||||||||||||||||||||||
| 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: |
++
+ ² - -- -(+) +/- |
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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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