Business tendency survey for manufacturing, mining and quarrying, Q4 2013

According to the Business tendency survey for the Norwegian manufacturing industry, there was a further increase in total output in the fourth quarter of 2013. Higher volumes within production of intermediate goods were the main reason for this rise. The growth was particularly strong among producers of basic chemicals and paper & paper products. Total output of capital goods also continued to increase, but the growth was somewhat weaker than in 2012. Lower activity within the ship, boat and oil platform building industry contributed to the slow down. The increase in total employment came to a halt after two and a half years of consecutive growth. A somewhat weaker rise in newly hired employees within production of capital goods and a further decline in the total number of employees among producers of intermediate goods and consumer goods explain this development.

Stronger demand and higher prices in export markets throughout the fourth quarter

The growth in total stocks was somewhat stronger towards the end of 2013 due to an increase in new orders from export markets. Improved competitiveness as a consequence of a weaker Norwegian currency, and economic recovery among trading partners explain this fact. The weakening of the Norwegian currency has had a positive effect on export prices, which improved throughout the second half of 2013 after a long period of decline. The growth in demand from export markets was particularly strong within production of intermediate goods and especially basic chemicals. Other industries that experienced a substantial improvement in market conditions were producers of computer and electrical equipment and producers of parts for motor vehicles. The level of new orders from domestic markets was more or less unchanged in the fourth quarter.

Prospects of further improvement for manufacturing in the first quarter

The general short-term outlook for the first quarter of 2014 is considered to be better. Prospects of an increase in output, new orders and market prices support this view, and fewer respondents experienced weak demand in export markets. The prospects were particularly good for producers of intermediate goods.

The industrial confidence indicator rose from 6 to 8 (seasonally-adjusted net figure) in the fourth quarter of 2013, and the improvement was particularly strong within production of capital goods. Higher total stocks of orders and prospects of stronger growth in total output explain this fact. International comparisons of the industrial confidence indicator are available from Eurostat (EU), The Swedish National Institute of Economic Research and Statistics Denmark.

Poor capacity utilisation within manufacturing

Average capacity utilisation for the Norwegian manufacturing industry is estimated at 79.6 per cent at the end of the fourth quarter of 2013. This is well below the historic average. Low levels for intermediate goods and consumer goods explain this fact. International comparisons of average capacity utilisation are available from Eurostat (EU).

The average number of working months covered by the current stock of orders was somewhat lower than in the corresponding quarter of 2012, but was above the historic average. This was partly due to high total stocks of orders among producers of machinery and equipment and producers of ships, boats and oil platforms. The indicator on resource shortage for manufacturing as a whole increased moderately in the fourth quarter. This was caused by growth in the share of managers reporting full capacity utilisation. The share reporting that lack of qualified labour is limiting production was unchanged compared with the previous survey.

Timeliness

The survey data was collected in the period from 10 December 2013 to 24 January 2014.

Assessment of industries in Q4 2013 and the short-term outlook ¹