Business tendency survey for manufacturing, mining and quarrying, Q1 2011

According to the business tendency survey, the Norwegian manufacturing industry experienced higher output in the first quarter of 2011 and there was a moderate rise in employment. A further increase in new orders from domestic and export markets explains these results. The rise in demand had a positive impact on market prices, which continued to improve. However, poor demand and fierce competition were still major bottlenecks in production, and average capacity utilisation did not rise above 79 per cent. International comparisons of average capacity utilisation are available from EUROSTAT .

Prospects of improved conditions

The general short-term outlook (Q2 2011) is considered to be better, and somewhat more respondents claim to be thinking about increasing the investments in fixed capital assets. Prospects of improved conditions in domestic and export markets support these results. The industrial confidence indicator falls from 11 to 10 (seasonally-adjusted net figure). International comparisons of the industrial confidence indicator are available from EUROSTAT (EU), the Swedish National Institute of Economic Research (Sweden) and Statistics Denmark .

More respondents are considering higher investments

Sectors producing intermediate goods (wood and wood products, paper and paper products, non-metallic mineral products, basic metals etc.) experienced strong growth in total output and a rise in employment. A further increase in new orders from domestic and export markets explains the improved conditions. The rise in demand had a positive impact on market prices, which continued to grow in the first quarter. Average capacity utilisation is estimated at 80.5 per cent. This is well below the historic average for the industries in question.

Many respondents consider the general short-term outlook (Q2 2011) to be better, and more of them claim to be thinking about increasing the investments in fixed capital assets.

Higher demand for capital goods

Sectors producing capital goods (machinery and equipment, ships, boats and oil platforms etc.) experienced a levelling of the decline in output in the first quarter. A rise in total stocks of orders due to an increase in new orders from domestic and export markets explains this result. However, market prices continued to fall, and poor demand and fierce competition were still major bottlenecks in production. Average capacity utilisation is estimated at 80.9 per cent, which is a weak result for the industries in question.

Many respondents consider the general short-term outlook (Q2 2011) to be better, and the employment rose for the first time since 2008. Prospects of a further rise in new orders support these results.

Higher production of consumer goods

Sectors producing consumer goods (food products, printing and reproduction, basic pharmaceuticals, furniture etc.) experienced higher output and a rise in employment in the first quarter. Growing demand from domestic and export markets was the reason for this development. The rise in demand had a positive effect on market prices, which continued to grow. Average capacity utilisation is estimated at 77.2 per cent. This is close to the historic average for the industries in question.

The general short-term outlook (Q2 2011) is considered to be better. Prospects of a further rise in output and demand support this view.