Business tendency survey for manufacturing, mining and quarrying, Q2 2010

According to the business tendency survey, the Norwegian manufacturing industry experienced a small gain in output in the second quarter of 2010. Improved conditions in export markets were the main reasons for this development. However, there was a further reduction in employment, and market prices continued to fall. Poor demand and fierce competition played a major role in restricting production. Resource shortage (see table 16 ) was thus hardly a problem. The number of working months covered by the current stock of orders was almost similar to the historic average for the manufacturing industry. Average capacity utilisation is estimated at a moderate 77.5 per cent. International comparisons of average capacity utilisation are available from EUROSTAT .

Improved conditions in the third quarter

Norwegian industrial managers consider the general short-term outlook (Q3 2010) to be positive. Prospects of an increase in new orders from the oil and gas sector support this view. The industrial confidence indicator is estimated at 5 (seasonally-adjusted net figure) in the second quarter. The result lies above the historic average and indicates a further improvement in the business cycle. International comparisons of the industrial confidence indicator are available from EUROSTAT (EU), the Swedish National Institute of Economic Research (Sweden) and Statistics Denmark .

Positive results for producers of intermediate goods

Sectors producing intermediate goods (wood and wood products, paper and paper products, non-metallic mineral products, basic metals etc.) experienced further growth in output. Employment, however, continued to fall, but the decline shows signs of levelling out in the second quarter. A rise in new orders from home and export markets caused total stocks to grow. The improvement in demand was reflected by an increase in market prices. Average capacity utilisation is estimated at 78.7 per cent. The number of working months covered by the current stock of orders was almost similar to the historic average.

The general short-term outlook is considered to be positive. Expectations of further growth in output, new orders and market prices support this result.

Prospects of a rise in new orders from domestic markets

Sectors producing capital goods (machinery and equipment, ships, boats and oil platforms etc.) experienced a reduction in output and employment. A lack of new orders caused total stocks to fall, and there was a decline in market prices. The number of working months covered by the current stock of orders was almost similar to the historic average. Average capacity utilisation is estimated at 78.4 per cent.

The indicator covering the general short-term outlook is changing from negative to neutral. Prospects of a rise in new orders from domestic markets support this result.

Higher prices on consumer goods

Sectors producing consumer goods (food products, printing and reproduction, basic pharmaceuticals, furniture etc.) experienced further growth in output. Employment, however, was lower than recorded in the previous survey. There was a rise in demand from export markets and market prices continued to improve. Average capacity utilisation is estimated at 75.6 per cent.

The general short-term outlook is considered as positive. Expectations of a rise in output, demand and market prices explain this result.