Business tendency survey for manufacturing, mining and quarrying, Q3 2011

According to the business tendency survey, the Norwegian manufacturing industry experienced steady growth in total output and a higher level of employment in the third quarter of 2011. A further increase in new orders from domestic markets explains these results. However, there was a modest rise in the number of managers who point to poor demand and fierce competition as factors that limit production.

Domestic prices continued to improve, while export prices fell. The size of new orders from export markets was more or less the same as recorded in the previous survey.

The number of working months covered by the current stock of orders was higher than the historic average for the manufacturing industry. A significant level of unfulfilled orders among producers of capital goods was the main reason for this result. Average capacity utilisation is estimated at 80 per cent in the third quarter of 2011. International comparisons of average capacity utilisation are available from EUROSTAT .

Decline in the industrial confidence indicator

The general short-term outlook (Q4 2011) is considered to be positive. Prospects of further growth in output and employment support this view. The industrial confidence indicator is estimated at 5 (seasonally-adjusted net figure) in the third quarter of 2011. This is significantly lower than recorded in the previous survey, and the decline signals weaker growth in total output. International comparisons of the industrial confidence indicator are available from EUROSTAT (EU), the Swedish National Institute of Economic Research (Sweden) and Statistics Denmark .

Decline in demand from export markets

Sectors producing intermediate goods (wood and wood products, paper and paper products, non-metallic mineral products, basic metals etc.) experienced a poor development in export markets. However, total output continued to grow. A further increase in new orders from domestic markets explains this result. Average capacity utilisation is estimated at 81.4 per cent in the third quarter of 2011. This is below the historic average for the industries in question.

The general short-term outlook (Q4 2011) is considered to be positive, but the growth in employment shows signs of levelling out.

Higher output of capital goods

Sectors producing capital goods (machinery and equipment, ships, boats and oil platforms etc.) experienced higher output and strong growth in employment. A significant level of unfulfilled orders due to several quarters of growth in new orders received explains this development. However, a lack of qualified labour restricts the increase in production, and market prices fell in spite of higher demand. Average capacity utilisation is estimated at 82 per cent in the second quarter. This is below the historic average for the industries in question.

The general short-term outlook (Q4 2011) is considered to be positive, and the investments seem to be growing. Prospects of a further rise in output, employment and the total stock of orders support these results.

Growing demand for consumer goods

Sectors producing consumer goods (food products, printing and reproduction, basic pharmaceuticals, furniture etc.) experienced higher output and improved market prices. Growing demand in domestic markets and in export markets explains this development. Average capacity utilisation is estimated at 75.7 per cent in the third quarter of 2011.

The general short-term outlook (Q4 2011) is considered to be positive. Prospects of improved conditions at home and abroad support this view.