Business tendency survey for manufacturing, mining and quarrying, Q4 2012

According to the Business tendency survey, the Norwegian manufacturing industry experienced weak growth in total output in the fourth quarter of 2012. A similar result was recorded for employment. A further decline in new orders from export markets explains why the growth was levelling out. The fall in demand posed a major challenge for producers of export goods. However, the number of working months covered by the current stock of orders was somewhat higher than at the same time in 2011. Huge total stocks of orders among suppliers to the oil and gas sector explain this fact.

Prices continued to improve in domestic markets, while the opposite was the case in export markets. Some of the decline in export prices was due to a strengthening of the Norwegian currency. Average capacity utilisation for the Norwegian manufacturing industry is estimated at 79.8 per cent in the fourth quarter of 2012. International comparisons of average capacity utilisation are available from Eurostat .

Growth in the industrial confidence indicator

The general short-term outlook (Q1 2013) is considered to be better. Prospects of further growth in production and employment support this view. The result is also in accordance with the development in the industrial confidence indicator, which grew from 1 to 5 (seasonally-adjusted net figure) in the fourth quarter of 2012. Values above zero indicate higher output in the upcoming period. International comparisons of the industrial confidence indicator are available from Eurostat (EU), the Swedish National Institute of Economic Research (Sweden) and Statistics Denmark .

Poor conditions in export markets

Sectors producing intermediate goods like wood and wood products, paper and paper products, non-metallic mineral products, basic metals etc., experienced a fall in output and employment. A decline in total stocks due to a lack of new orders explains this development, and the poor demand caused market prices to fall. The conditions were particularly weak in export markets. Average capacity utilisation is estimated at 80 in the fourth quarter of 2012. This result lies below the historic average. The situation was especially difficult for producers of wood and wood products, paper and paper products and also non-ferrous metals.

The general short-term outlook (Q1 2013) is considered to be better, and somewhat more respondents share this view. Prospects of growth in output and new orders explain the higher optimism.

Shortage of qualified labour

Sectors producing capital goods like machinery and equipment, ships, boats and oil platforms, repair and installation etc., experienced a further increase in output and employment. However, a shortage of qualified labour hampered the growth in production. The situation was especially difficult for suppliers to the oil and gas sector. Total stocks were more or less unchanged after eight quarters of sustained growth. A fall in new orders from export markets explains this decline. Average capacity utilisation is estimated at 82.5 per cent for the industries in question. The number of working months covered by the current stock of orders was higher than in the fourth quarter of 2011 and lay above the historic average.

The general short-term outlook (Q1 2013) is considered to be better, and the investments seem to be growing. Prospects of even further growth in output and employment explain these results.

Higher demand for food products and beverages

Sectors producing consumer goods like food products and beverages, printing and reproduction, basic pharmaceuticals, furniture etc., experienced somewhat stronger growth in output. Higher demand for food products and beverages in domestic markets, and improved supply of raw materials, explain this rise. However, employment fell in the second half of 2012. Fewer employees in industries like printing and production of furniture explain some of this decline. Average capacity utilisation is estimated at 76.1 per cent in the fourth quarter of 2012. This result lies below the historic average.

The general short-term outlook (Q1 2013) is considered to be better, and the investments seem to be growing. Prospects of further growth in output, demand and market prices explain these results.