Norwegian industrial managers report growth in production in manufacturing in the 3rd quarter. New orders from both the domestic and export markets were unchanged. The general expectations for the 4th quarter of 2024 are positive for all types of goods.
The business tendency survey for the 3rd quarter of 2024 shows that overall manufacturing production increased moderately, but there are large sector differences. Producers of and report unchanged production. The producers of are still experiencing a clear increase in production.
After a period of about two years with unchanged or slightly declining manufacturing output, the assessments from manufacturing leaders show growth in production volume over the past 2 quarters. The growth is driven by high activity in the supplier industry, which can be linked to the high oil and gas investments. At the same time, the results for building of ships, boats and oil platforms show a lower growth rate in production development and that new orders have decreased in recent quarters.
Industrial leaders report growth in total industrial employment in the 3rd quarter. It is the producers of capital goods that are responsible for the growth. Producers of consumer goods and intermediate goods report unchanged employment.
Unchanged total stock of orders
Overall, industrial leaders report that new orders from the domestic market are unchanged in the 3rd quarter. Producers of intermediate goods report a decline in new orders from the domestic market, while the majority of producers of consumer goods report a moderate increase. For producers of capital goods, new orders from the domestic market are reported to be unchanged. This applies to producer consumer goods and intermediate goods, while a moderate rise is reported for producer of capital goods.
Total stock of orders is unchanged in the 3rd quarter compared to the previous quarter. Producers of intermediate goods report a fall in the total stock of orders, while producers of consumer goods report a moderate increase. For capital goods, the total stock of orders is reported to be unchanged.
A large number of manufacturing leaders report continued growth in in the 3rd quarter. Producers of consumer goods and intermediate goods that have the clearest growth in cost prices. Since the rise in cost prices is more pronounced than for product prices, it is not surprising that there are reports of falling in manufacturing in the 3rd quarter. However, fewer than in previous quarters report lower profitability.
Positive expectations for the 4th quarter of 2024
The general outlook for the 4th quarter of 2024 is positive for manufacturing. The producers of all types of goods are optimistic, but producers of capital goods are most positive about the coming quarter.
Manufacturing leaders expect higher production volumes and growth in average employment in the 4th quarter, compared with the 3rd quarter. An increase in new orders is expected from both the domestic and export markets. The total stock of orders is also expected to increase in the 4th quarter.
It is the producers of capital goods who report the best future prospects. They still expect continued clear growth in production and employment, and growth in new orders from both markets, and an increase in the total stock of orders.
The producers of intermediate goods and consumer goods report somewhat weaker future prospects. Both expect moderate growth in overall production and new orders from both markets, and unchanged stock of total orders. For consumer goods, employment is expected to be somewhat lower in the 4th quarter.
It is also expected that cost prices and prices of products sold to both the domestic market and the export market will continue to increase in the 4th quarter.
Factors that limit investment
Manufacturing leaders report that investment plans remain unchanged for manufacturing as a whole. The proportion of manufacturing managers who believe that prices are a limiting factor on investment is still relatively high
The industrial confidence indicator signals lower growth in the 4th quarter
in the 3rd quarter of 2024 was 1.5 (-adjusted) which is down from 3.5 in the previous quarter. The indicator is now above the historical average of 2.9.
The industrial confidence indicator indicates lower production in the coming quarter for producers of intermediate goods. For producers of capital goods and consumer goods, it gives indications of increased overall production in the 4th quarter.
Access to qualified labor limits production
The proportion of industry leaders reporting that weak demand and strong competition limit is still relatively high but has fallen slightly compared to the share in the previous quarter. At the same time, historically speaking, there is still a high proportion of manufacturing managers who point out that a lack of qualified labor is a factor that contributed to limiting production in the 3rd quarter. which was very high in connection with the pandemic, has stabilized at lower levels in the past year.
The average for Norwegian manufacturing was calculated to 78.3 per cent at the end of the 3rd quarter. This is marginally lower than at the end of 2nd quarter. The capacity utilisation is still at a lower level than the historical average of 80.0 per cent. International comparisons of average capacity utilisation are available from Eurostat (EU).
Source: Statistics Norway
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