Business tendency survey for manufacturing, mining and quarrying, Q4 2010

According to the business tendency survey, the Norwegian manufacturing industry experienced moderate growth in total output in the fourth quarter of 2010. A further increase in new orders from home and export markets explains this development. The growth in demand had a positive effect on market prices, which rose after a period of decline. Poor demand and fierce competition still played a major role in restricting production. However, the fall in employment showed signs of levelling out. A similar development was recorded for investments. The number of working months covered by the current stock of orders has risen throughout 2010 and was higher than the historical average for manufacturing. Average capacity utilisation is estimated at 78.6 per cent in the fourth quarter. International comparisons of average capacity utilisation are available from EUROSTAT .

Prospects of improved conditions

Norwegian industrial mangers consider the general short-term outlook (Q1 2011) to be improving. Prospects of further growth in new orders and market prices support this view. The industrial confidence indicator has increased from 8 to 11 (seasonally-adjusted net figure). The result implies a somewhat steeper growth 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 .

Higher employment among producers of intermediate goods

Sectors producing intermediate goods (wood and wood products, paper and paper products, non-metallic mineral products, basic metals etc.) experienced stronger growth in output, and the employment rose for the first time since 2008. A further increase in new orders from home and export markets explains these results. The rise in demand had a positive effect on market prices, which improved in the fourth quarter. Average capacity utilisation is estimated at 79.2 per cent.

Many respondents consider the general short-term outlook (Q1 2011) to have improved, and the investments seem to be growing. Prospects of a further increase in output, new orders and market prices explain this development.

Prospects of improved conditions for producers of capital goods

Sectors producing capital goods (machinery and equipment, ships, boats and oil platforms etc.) experienced a further decline in output and employment. Poor demand and fierce competition played a major role in restricting the production. The supply of new orders from domestic markets was somewhat higher than in the third quarter, while the supply of new orders from export markets was more or less unchanged. Market prices, however, continued to fall. The number of working months covered by the current stock of orders continued to grow in the fourth quarter, and average capacity utilisation is estimated at 79.5 per cent.

A growing number consider the general short-term outlook (Q1 2011) to have improved, and the decline in investments shows signs of levelling out. Prospects of a rise in output, employment and new orders explain this development.

Higher demand for 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 within the food and beverages sector contributed to this decline. Domestic demand for consumer goods was significantly stronger in the fourth quarter. Demand from export markets also continued to grow. The rise in demand had a positive effect on market prices. Average capacity utilisation is estimated at 76.5 per cent.

The general short-term outlook (Q1 2011) is considered to be improving. Prospects of a rise in output, demand and market prices support this view.