The business tendency survey for the 4th quarter of 2021 still shows growth in total output, but the growth rate is somewhat lower than in the 3rd quarter. The producers of Covers industries such as wood and wood products, paper and paper products, basic chemicals and basic metals. Often referred to as traditional export industries. and Covers industries such as food products and beverages, printing and reproduction, pharmaceuticals and furniture. are experiencing a clear increase in production while the growth among producers of Covers industries such as machinery and equipment, ships, boats and oil platforms, repair and installation. Often referred to as the engineering industry. is far more moderate. Here, growth is dampened by reports of a clear decline in production for producers in Ships, boats and oil platforms. There are still some of the industrial leaders who report that lack of access to skilled labor, raw materials and other input factors have limited production volume in the 4th quarter (see figure 6). Lack of raw materials and input factors are still linked to logistics challenges in the world market.
Industrial leaders report growth in total industrial employment in the 4th quarter compared with the 3rd quarter.
Strong growth in both product and cost prices
The total stock of orders in manufacturing shows still a clear growth in the 4th quarter. Growth in stock of orders are reported by producers of all types of goods. The industrial leaders also report clear growth in new orders for the export market while the growth in new orders for the domestic market is more moderate. Growth in new orders is reported in both markets for all types of goods. but growth in new orders is strongest for all types of goods for the export market.
Industrial managers are reporting significant growth in the prices, both in domestic and export market for overall manufacturing in the 4th quarter. Price growth is reported for all types of goods in both markets. For producers of intermediate goods, the growth in prices is particularly strong. Producers of intermediate goods are largely export-oriented.
Very many industrial managers report increasing growth in The development in the prices that the company pays for the goods and services that are included in the production (product input), and on the prices of production equipment and facilities used in the production process. in the 4th quarter. Growth in prices were also strongest for cost prices for producers of intermediate goods. Overall, stronger growth in cost prices than in product prices was reported. This substantiates that there are reports of declining The development in the profitability of the company's sales of goods or services. Profitability means the change in the difference between current operating expenses and current operating revenues. in manufacturing, as a whole in the 4th quarter (see box at the bottom of the article).
Positive expectations for the first quarter of 2022
The general outlook for the 1st quarter of 2022 is clearly positive, but the proportion with an optimistic view for the coming quarter is somehow lower than in the previous survey. Although producers of all goods types have positive expectations, it is producers of intermediate goods and capital goods who have the most optimistic view related to the coming quarter. The industrial managers further report that the total production volume is expected to grow during the 1st quarter of 2022 compared with the 4th quarter of 2021. Employment growth is also expected in the coming quarter. It is reported that new orders from both the domestic and export markets will increase, and further growth in the total stock order is also expected. The strength of the expected growth for the various indicators is not the same for the different good types. Generally, the strongest growth is expected for producers of intermediate goods and capital goods, while the expected growth is somehow weaker for producers of consumer goods.
It is reported that adopted investment plans are marginally adjusted upwards somewhat for manufacturing. In the previous survey a new statistics table (see box at the bottom of the article) was introduced. This table shows the development in which factors the managers state as limiting the investments. In recent quarters, a lower proportion of industrial managers state that expected developments in demand limit the investments. At the same time, an increasing proportion of industrial managers state that the The prices of the investment goods (production equipment and facilities used in the production process) that the company purchases are so high that it limits the implementation of planned investments. constitute a limiting factor in the investments.
The industrial confidence indicator indicates further growth
This is the average of the responses (balances) to the questions on expected volume of production, total stock of orders and inventories of own products for sale (the latter with an inverted sign). See Definitions in ‘About the statistics’ for further details. in the 4th quarter was 8.6 Figures that are adjusted for calendar effects and seasonal variation. Such adjustment gives a more accurate picture of the underlying trend in the time series and makes it easier to compare the results of subsequent quarters. which is marginally lower than in the previous quarter. The indicator is still well above the historical average of 3.1 and this indicates growth in production volume for the 1st quarter of 2022.
The level of the industrial confidence indicator for the various types of goods is relatively similar, which points in the direction of relatively broad-based growth prospects in manufacturing.
Values above zero indicate that total output will grow in the forthcoming quarter, while values below zero indicate that total output will fall. International comparisons of the industrial confidence indicator are available from Eurostat (EU), The Swedish National Institute of Economic Research and Statistics Denmark.
Access to raw materials limits production
Compared with the previous survey, there are a higher proportion of industry leaders who highlight that the lack of qualified labor and supply of raw materials and/or electric power are factors that contributed to limiting production in the 4th quarter of 2021. At the same time, a lower proportion of industry leaders point out that weak demand and strong competition have limited production. The sum of percentages for those who have reported that lack of qualified labour and raw materials/electric power limits production, plus the percentage of establishments with capacity utilisation above 95 per cent. has risen sharply in recent quarters and is now at its highest level since the 2nd quarter of 2008.
The figure shows that in recent quarters there has been an increasing proportion of industrial leaders who point out that the lack of qualified labor and access to raw materials and / or electric power are factors that contribute to limiting production. At the same time, in the same period, there has been an ever lower proportion of industrial leaders who point out that weak demand and strong competition have limited production.
The average How much of the available production capacity is utilised. A high capacity utilisation means that it is difficult to produce more without investing, while a low capacity utilisation means having capacity that is not being used. for Norwegian manufacturing was calculated to 80.6 per cent at the end of the 4th quarter of 2021. The utilization rate is higher than it was at the end of the 3rd quarter of 2021, and it is now above the historical average of 80.0 per cent. International comparisons of average capacity utilisation are available from Eurostat (EU).
Timelines
The survey data was collected in the period from 9 December 2021 to 18 January 2022.
As of this publication, new indicators are introduced in the statistics. The indicator «Cost prices» and «Profitability» for actual and expected changes in the next quarter are published in the table «08264: Business tendency survey. Tendencies» Cost prices measure the development in the prices that the company pays for the goods and services that are included in the production of the final item (raw material). As well as on the prices of the capital goods (production equipment and facilities used in the production process) that the company purchases or, in those cases where another part is responsible for the entire investment project, the price of the investment delivery. Profitability measures the development in the profitability of the company's sales of goods or services. Profitability means the change in the difference between current operating expenses and current operating revenues. In this case, it is not considered factors that affect the company's profits that are not directly linked to the company's main activity (eg. sales of electricity). In addition, a new statistics bank table is published which shows reasons that limit the company's investment activity: «12786: Business tendency survey. Limiting factors for investments». For "Limiting factors for investments", business leaders are asked to choose the most important reasons that limit new investments (several answers possible). If they have not planned investments, they can use the option «No special». The reasons that are measured are these: «Access to credit» if they plan to invest in new real capital, but have problems establishing enough financing. «Expected development in demand» if they expect lower demand and for that reason it is risky to invest in new capacity. The alternatives for investment costs are used if it is considered that «Prices for Capital Good» and /or «Financing cost» are so high that it limits the implementation of planned investments. «Governmental requirement» if they conclude that public requirements related to an investment (for example environmental requirements) are so high that planned investments are limited. «Access to governmental subsidy» if the planned investments are limited by rejection of an application for public grants or that the grants are too low. «Available production capacity» if at the end of the quarter they have spare production capacity and for that reason do not wish to carry out planned investments at the present time. Companies that have other limiting factors than those specified in the form, use the option «Other factors» where the business leaders can specify what these factors are.
