Business tendency survey for manufacturing, mining and quarrying, Q3 2010

According to the business tendency survey, the Norwegian manufacturing industry experienced moderate growth in total output in the third quarter of 2010. Improved conditions in home and export markets explain this result. The growth in demand had a positive effect on market prices, which ceased falling. However, poor demand and fierce competition still played a major role in restricting production, and employment continued to fall. The number of working months covered by the current stock of orders is somewhat higher than in 2009. The same development is recorded for average capacity utilisation, which is estimated at 78.5 per cent. International comparisons of average capacity utilisation are available from EUROSTAT .

Prospects of further growth in total output

Norwegian industrial managers consider the general short-term outlook (Q4 2010) to be positive. Prospects of further growth in output and new orders received support this view. The industrial confidence indicator has risen from 5 to 7 (seasonally-adjusted net figure). The result implies a somewhat stronger growth in output in the fourth quarter of 2010. International comparisons of the industrial confidence indicator are available from EUROSTAT (EU), the Swedish National Institute of Economic Research (Sweden) and Statistics Denmark .

Increased demand for 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 total output, and the decline in employment came to a halt. A rise in new orders from home and export markets explains this development. The growth in demand had a positive effect on market prices, which improved in the third quarter. The number of working months covered by the current stock of orders was somewhat higher than recorded in the second quarter. Average capacity utilisation is estimated at 80 per cent.

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

Further reduction in output for producers of capital goods

Sectors producing capital goods (machinery and equipment, ships, boats and oil platforms etc.) experienced a further reduction in output and employment. However, fewer managers report negative results, and the fall in total stocks of orders showed signs of levelling out. A rise in new orders from domestic markets explains this development. Market prices continued to fall in the third quarter. The number of working months covered by the current stock of orders was close to the historic average, while average capacity utilisation is estimated at 79.8 per cent.

The indicator covering the general short-term outlook is changing from neutral to positive. Prospects of a rise in new orders 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, continued to fall. Structural changes (fewer and bigger production plants) within the food and beverages sector contributed to this decline. Demand in domestic markets was somewhat weaker than before, while demand in export markets was somewhat stronger. Market prices continued to improve in the third quarter. Average capacity utilisation is estimated at 75.6 per cent. The result is more or less unchanged from the previous survey.

The general short-term outlook is considered to be positive. Prospects of a further rise in output and demand explain this result.