Business tendency survey for manufacturing, mining and quarrying, Q2 2004

According to the Business Tendency Survey the manufacturing industry experienced a rise in output, capacity utilisation and new orders throughout the second quarter, but this was not sufficient to prevent a further decline in the total rate of employment. Home market prices seem to be rising. A decline in the number of managers who point at lack of demand and competition in the home market as limiting factors for production, indicates that this is due to an increase in demand. Average capacity utilisation is estimated to about 79 per cent by the end of the second quarter. Seen in a historical perspective this must be characterised as a fairly low level of activity.

The general outlook in the short run (Q3 2004) is considered positive. This view is supported by expectations of further growth in capacity utilisation, new orders and home market prices. The industrial confidence indicator¹ indicates a rise in output. For international comparisons of results for this indicator we refer to EUROSTAT and The Swedish National Institute of Economic Research .

Intermediate goods: Improved market conditions

Sectors producing intermediate goods (pulp, paper and paper products, the chemical industry, basic metals and others) experienced improved conditions throughout the second quarter. Output, capacity utilisation and new orders appear to be growing at a faster rate than recorded in the previous survey, and the decline in the employment rate seems to have stopped. Market prices are rising in home and export markets, and fewer managers point at lack of demand and competition as limiting factors for production. An increasing number of managers report of lack of capacity and shortage of qualified labour as limiting factors. Average capacity utilisation is estimated to about 82 per cent.

The general outlook in the short run is considered positive. This view is supported by expectations of further growth in output, capacity utilisation and new orders. Market prices are also expected to rise.

Capital goods: Increase in production

Data from sectors producing capital goods (metal products, machinery and equipment, offshore-related activity and others) indicate that the level of output and capacity utilisation is growing at a faster rate than recorded in the previous quarter. The total rate of employment seems to have stabilised. There is a significant drop in the number of managers that point at weak demand in the home market as a limiting factor for production, but prices continued to fall both in the home and export markets. Fierce competition in offshore-related activities may be a contributing factor for the negative development in prices. Average capacity utilisation is about 79 per cent.

The general outlook in the short run is considered positive. This view is supported by expectations of growth in output, capacity utilisation and new orders throughout the third quarter. The total rate of employment is expected to remain unchanged.

Consumer goods: Positive development in prices

Sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) experienced growth in output and capacity utilisation, and there are signs of rising prices both in the home and export market. The number of managers pointing at lack of demand and stronger competition in the home market as limiting factors for production is somewhat reduced since the previous survey.

The general outlook in the short run is considered positive. Growth in production, capacity utilisation and new orders are expected in the third quarter. An increasing number of managers also anticipate a further rise in home market prices.

¹The industrial confidence indicator and links to international comparisons are described in the press release Q3 2003.