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This is an archived release.
Signals of growth in industrial output
There are strong indications of improved conditions for the manufacturing industry and Norwegian managers are fairly optimistic about the near the future. However, indications of a decline in export prices contribute to dampen the expectations.
According to the Business Tendency Survey, the manufacturing industry experienced growth in both output and capacity utilisation in the second quarter of 2005, but there is no indication of a rise in employment. The level of new orders from the home market is higher than in the first quarter of 2005, and there are indications of a rise in home market prices. Export prices, however, seem to be falling and the growth in new orders from the export market seems to be levelling out. A stronger Norwegian krone is a possible explanation for this development. The indicator measuring the number of working months covered by the current stock of orders is somewhat higher than the corresponding figure for 2004, and an increasing number of managers report that lack of capacity and shortage of qualified labour are factors that limit production. Fewer managers say that they experience difficulties related to lack of demand and fierce competition. The average capacity utilisation is estimated to be about 82 per cent.
The general outlook in the short term (Q3 2005) is considered to be better, but a decline in export prices is expected. A growing number of managers report that they are considering an increase in gross capital investments. This may lead to an increase in output in the long run. The industrial confidence indicator1 is estimated to be 9 (net figure seasonally adjusted). This result indicates a rise in output in the third quarter of 2005. For international comparisons, go to EUROSTAT (EU) and The Swedish National Institute of Economic Research (Sweden).
Intermediate goods: Decline in export prices
The results from sectors producing intermediate goods (pulp, paper and paper products, chemical industry, basic metals and others) show clear indications of rising output, capacity utilisation and employment in the second quarter of 2005. The growth in new orders from the export market seems to be levelling out, and for the first time in nine quarters there are signs of a decline in export prices. Home market prices continue to grow. An increasing number of managers say that lack of capacity and shortage of qualified labour are factors that limit production. There is also a marked decline in the number of managers who report lack of demand from the home market. The average capacity utilisation is estimated to be about 85 per cent.
The general outlook in the short term is considered to be better, but fewer managers share this opinion. Export prices are expected to fall.
Capital goods: Considerable growth in new orders
The results from producers of capital goods (metal products, machinery and equipment, offshore-related activity and others) indicate growth in production, capacity utilisation and employment in the second quarter of 2005. A further increase in new orders from home and export markets seems to ensure stable growth in the total stock of orders. A rise in the number of working months covered by the current stock of orders supports this result. Fewer managers point at lack of demand and fierce competition as factors that limit production, while more point at lack of capacity and shortage of qualified labour. Average capacity utilisation is estimated to about 84 per cent.
The general outlook in the short term is considered to be better. Positive expectations for the development in output and home market prices support this view. A growing number of managers say that they are considering an increase in gross capital investments.
Consumer goods: Negative development in export prices
The results from sectors producing consumer goods (food industry, publishing, pharmaceutical industry and others) indicate a rise in output and capacity utilisation in the second quarter of 2005. A growing number of managers report falling demand in the export market, but this seems to be compensated by a positive development in the home market. There are indications of a possible decline in export prices, and the growth in home market prices seems to continue.
The general outlook in the short term is once again considered to be better. Expectations of a rise in output support this result. A growing number of managers are considering an increase in gross capital investments.
1 The industrial confidence indicator and links to international comparisons are described in the press release Q3 2003.
| Assessment of industries in Q2 and the short-term outlook |
| Industry | Prospects | Background | |||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Food products, beverages and tobacco | +/- | Reduction in output and employment. Increase in demand from the home market, while demand from the export market has declined. Home market prices have increased. General outlook for the forthcoming quarter is still judged as better, and increases in production and capacity utilisation are expected in Q3. A further reduction in the level of employment is expected. | |||||||||||||||||||||||||||||||||||||
| Wood and products of wood | ++ | The positive development in the industry continues with increases in production and employment and a high level of capacity utilisation. Many managers report that lack of capacity is limiting production, and consider the general outlook for Q3 as better. Further increases in output and capacity utilisation are expected. Export prices are expected to decline, while home market prices are expected to rise. | |||||||||||||||||||||||||||||||||||||
| Pulp, paper and paper products | -(+) | Increased output in Q2. Reduction in employment and new orders from the export market. An increasing number of managers report that lower demand from the export market is a limiting factor for production. General outlook for Q3 is considered worse for the first time since Q1 2003. Nevertheless an increase in production in the forthcoming quarter is expected, but fewer than in the previous quarter shares this opinion. | |||||||||||||||||||||||||||||||||||||
| Basic chemicals | -(+) | More or less unchanged output and somewhat lower capacity utilisation. Employment has increased. Reduced level of new orders and a decline in prices. General outlook for Q3 is considered to be worse. Production is expected to increase, but a further decline in home and export prices are expected. | |||||||||||||||||||||||||||||||||||||
| Basic metals, non-ferrous | +/- | More or less unchanged level of production and employment. Fall in new orders from the export market in Q2. Stable prices. The number of managers pointing at reduced demand from the export market as a limiting factor for production has increased. General outlook for Q3 is positive. This view is supported by expectations of further growth in output, capacity utilisation and new orders. Export prices are expected to decline in the forthcoming quarter. | |||||||||||||||||||||||||||||||||||||
| Engineering, total | ++ | On the whole, the engineering industry has seen a positive development with higher levels of production, capacity utilisation and employment in Q2. Many managers report an increase in new orders. Home market prices have increased, while export prices have fallen. The number of managers pointing at lack of demand and stronger competition as limiting factors for production is reduced. General outlook is considered to be better. This view is accompanied by expectations of further growth in output, employment and orders in Q3. A growing number of managers report that they consider increasing their gross capital investments. | |||||||||||||||||||||||||||||||||||||
| Metal products | ++ | Higher levels of production, capacity utilisation and employment. The stock of orders has increased, mainly due to an increase in new orders from the home market. Increase in prices. Many managers report that lack of capacity and supply of qualified labour are limiting production. Many managers consider the general outlook to be better, and further growth in output, capacity utilisation and stock of orders are expected. Home market prices are expected to be stable, while export prices are expected to decline. | |||||||||||||||||||||||||||||||||||||
| Machinery and equipment | ++ | Growth in output, capacity utilisation and employment in Q2. Increase in new orders from the home and export market. The average number of working months covered by the current stock of orders is at the highest level since Q1 1999. Increase in home market prices and more or less unchanged export prices. Many managers consider the general outlook to be better, and further increases in production and new orders are expected in Q3. | |||||||||||||||||||||||||||||||||||||
| Electrical and optical equipment | ++ | Increased level of production, capacity utilisation and employment. Growth in new orders. There is a large increase in the number of managers pointing at lack of qualified labour as a limiting factor for production. Home market prices are more or less unchanged and export prices have declined. The general outlook is considered by many managers to be better, and the positive development in output and new orders are expected to proceed in Q3. A further decline in export prices is expected, while home market prices are expected to remain stable. | |||||||||||||||||||||||||||||||||||||
| Offshore-related activity incl. transport industry included | ++ | Growth in output, capacity utilisation and employment. Many managers report an increase in new orders from both the home and export market. The average number of working months covered by the current stock of orders has increased for the fourth consecutive quarter, and is now at the highest level since Q1 2001. Many managers consider the general outlook for Q3 to be better, and further increases in output, new orders and employment are expected. Home market prices are expected to rise, while export prices are reduced. | |||||||||||||||||||||||||||||||||||||
| In the column for Prospects a total evaluation of the present situation and expected short-term developments is marked with the symbols + and -. The following codes and constellations are used: | ++ + ~ - -- -(+) +/- | Very good Good Stable Weak Quite weak Weak, but with certain positive indications A situation where the + and - factors even out. | |||||||||||||||||||||||||||||||||||||
Additional information
The statistics provide current data on the business cycle for manufacturing, mining and quarrying by collecting business leaders’ assessments of the economic situation and the short term outlook.
Contact
-
Edvard Andreassen
E-mail: edvard.andreassen@ssb.no
tel.: (+47) 40 90 23 32
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Ståle Mæland
E-mail: stale.maeland@ssb.no
tel.: (+47) 95 05 98 88