Business tendency survey for manufacturing, mining and quarrying, Q1 2013

According to the Business tendency survey for the Norwegian manufacturing industry, the growth in total output came to a halt in the first quarter of2013. Asomewhat similar development was recorded for employment. A decline in total stock of orders due to weak demand and lower prices in export markets explains this slowdown. However, home market prices continued to rise, and the supply of new orders from home markets remained at a high level. The average number of working months covered by the current stock of orders was somewhat higher than in the corresponding quarter of 2012 and lay above the historic average for manufacturing. Huge total stocks of orders among suppliers to the oil and gas sector explain this fact. The share of managers reporting that demand and competition are curtailing production was somewhat higher than recorded in the previous survey, while the indicator on resource shortage was down. Average capacity utilisation for the Norwegian manufacturing industry is estimated at 79.6 per cent at the end of the first quarter of 2013. International comparisons of average capacity utilisation are available from Eurostat (EU).

Somewhat mixed signals for the forthcoming quarter

The general short-term outlook (second quarter 2013) is considered to be better, and planned investments are upward adjusted. Prospects of growth in total output and new orders received support this view. However, the manufacturing leaders were more optimistic about the forthcoming quarter in recent surveys than in reports of the actual development. This misjudgement may be connected with increased uncertainty about future international market conditions. At the same time, the industrial confidence indicator fell from 5 to 1 (seasonally-adjusted net figure). A reduction in the total stock of orders in the first quarter of 2013 and a build-up of inventories of finished goods were the main reasons for this decline. Values close to zero indicate that total output will be more or less unchanged in the forthcoming quarter. International comparisons of the industrial confidence indicator are available from Eurostat (EU), The Swedish National Institute of Economic Research and Statistics Denmark.

Poor demand for intermediate goods

Producers of intermediate goods experienced a further decline in output, lower employment and weaker market prices. A lack of new orders from home and export markets explains these results. The situation was particularly poor for traditional export industries such as basic metals and chemicals. However, market conditions were also difficult for producers of building materials. Average capacity utilisation is estimated at 79.6 per cent at the end of the first quarter of 2013. The average number of working months covered by the current stock of orders has fallen, and lay below the historic average for the industries in question.

The general short-term outlook for the second quarter of 2013 is considered to be better, and the investments seem to be growing. Prospects of growth in output and demand explain these results.

A decline in total stock of orders for producers of capital goods

Producers of capital goods experienced weaker growth in total output, and somewhat fewer respondents claimed to be struggling with a shortage of qualified labour. A decline in total stock of orders due to a fall in new orders received from home and export markets explains these results. However, employment continued to rise and the investments seem to be growing. Average capacity utilisation is estimated at 82.5 per cent at the end of the first quarter 2013. The average number of working months covered by the current stock of orders remained at a high level and lay above the historic average for the industries in question. 

The general short-term outlook for the second quarter of 2013 is considered to be better, but fewer respondents share this view. Lower expectations of future growth in new orders might explain this result.

Less export of consumer goods

Producers of consumer goods experienced a slowdown in the growth in output and a further decline in employment. Lower demand from export markets and layoffs due to fierce competition within some of the industries were the main reasons for this development. Home market prices continued to improve, while export prices stopped growing. Stronger demand in the domestic market explains the rise in home market prices. Average capacity utilisation is estimated at 76.5 per cent at the end of the first quarter of 2013. The result lies somewhat below the historic average for the industries in question.

The general short-term outlook for the second quarter of 2013 is considered to be better, and the investments seem to be growing. Prospects of higher output, a rise in demand and improved market prices explain these results.