Business tendency survey for manufacturing, mining and quarrying, Q2 2000

The manufacturing leaders have an overall positive evaluation of the short-term outlooks - according to the Business Tendency survey for 2. Quarter. The production development turned out fairly stable through 2. Quarter based on high activity in many industrial sectors and positive tendencies for new orders received from export markets and to some extent from domestic markets seem to be some of the factors behind. The shipyards and the offshore directed sectors, which for a long time have been dominating the manufacturing total, are still having a weak production performance. Some of the engineering sectors have however improved their production performance. Even the engineering leaders seem to be optimistic as concern the short-term outlooks. The base for this seems to be an expected growth in new orders from domestic markets. In the medium run the manufacturing leaders seem to expect growth in production as well as new orders received.

Production and new orders received

For the industries producing intermediate goods, which includes the traditional export industries, the production performance has been very good. Capacity utilisation is slightly above 80 per cent - an increase compared to 2. Quarter last year, though still lower than in the period 1995-1997. Increasing prices in the international markets have also boosted the growth in the values of new orders received.

For industries producing capital goods the production performance are lagging behind. The production activity level and rate the capacity utilisation has stabilised - though on a noticeable lower level than in 1996-1997. The development in new orders received is still weak but have a clear positive tendency - even from the domestic markets. For industries producing consumer goods the production turned somewhat below what was expected. The level of activity is stable and the rate of capacity utilisation remains at the same level as in the two last years.

For the manufacturing industries as a whole the rate of capacity utilisation fell noticeably in 1998, but has since been fairly stable - around 80 per cent. Analysis of the capacity utilisation rate must take into consideration the substantial investments within manufacturing during the last 4 - 6 years.

Bottlenecks in production

The manufacturing industry has for some time had problems with weak demand and/or increased competition in the markets. This is still the main bottleneck delimiting the production performance. Seven out of ten enterprises had such problems in 2. Quarter while four out of ten in 1997. The overall manufacturing figures is however highly dominated by the current engineering industry situation. In non-engineering industries - like intermediate goods industries - such problems seem in general to be a very small. The capacity will at a high level of activity become a delimiting factor in production. Some 7 per cent of the enterprises seem to have such problems in 2. Quarter - some up compared with last year. Large variations are found in the rate of capacity utilisation across industries. An increasing number of manufacturing industries seems also to experience problems when recruiting new members for the staff. The manufacturing leaders expect that this problem will escalate during 3. Quarter.