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The economic situation in industry at the end of the third quarter was characterized by high capacity utilization and a modest rise in production. Demand in the export markets did not develop as expected, and prices in major sectors were clearly down compared to one year ago. Demand in the home market was about as predicted. Total orders in hand increased slightly, but are nevertheless viewed as too low in comparison to the current scope of production. Lower export prices and increased prices for electric power and energy goods influenced profitability and output.
Industrial leaders in Norway expect no major changes in the economic situation in the short term, according to Statistics Norway's economic barometer for third quarter 1996. High capacity utilization and production, but continued weak international markets and low prices are some of the factors behind their moderate outlook.
For industry as a whole, the seasonally adjusted figures show there was a weak rise in production and capacity use in the third quarter. Production was higher in the mineral industry, wood products industry and parts of the engineering industry. In export oriented sectors like basic chemicals, wood processing and metals, the trend was clearly weaker.
The export industry continues to face weak international markets, and some sectors have also experienced significant price cuts on products in the past few quarters.
Outlook for 4th quarter
Business executives do not expect major changes in the economic situation in the short term. Earlier this year, there were great expectations of increased production in the final months of the year, but in the third quarter expectations were lowered. Seasonally adjusted figures for anticipated production and capacity utilization indicate only small changes in production in the fourth quarter. A moderate increase in demand is expected in the home market. The leaders see few signs of improvement in the short term in the export markets.
Weekly Bulletin issue no. 46, 1996