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National Report Regional Network - June 2004

Summary

• The Norwegian business sector is experiencing positive economic developments with increased optimism. Growth in exports, oil-related manufacturing, construction, retail trade and services for the business sector is gathering pace.
• Increased global demand with higher prices is providing a substantial impetus for export-oriented process industry. Niche export enterprises are also experiencing solid growth. A high level of offshore investment and the prospect of stable, high oil prices is boosting the oil-related supplier industry.
• Developments in household disposable income have contributed to increasing demand and consumption for domestically oriented manufacturing, but the growth rate has levelled off.
• Retail trade is still seeing rising demand. Growth is focused particularly on capital goods such as cars, leisure boats, furniture, goldsmith products, electrical articles and building products.
• Household demand for services is continuing to grow, particularly in the travel and finance sectors.
• Brisker business sector activity is leading to increased demand for commercial services such as consulting, architects and temporary personnel.
• The construction sector is showing a rising growth curve driven by residential construction, rehabilitation and public infrastructure such as schools and roads.
• Up to the present, economic recovery, improved profitability and a persistent low interest rate level are only contributing to moderately increased investment. The willingness to invest is most pronounced in retail trade, but is increasing most in manufacturing. A declining tendency is noted in the public sector. Region South-West is heading investment growth.
• There is a moderate tendency to increased employment throughout the private sector. For the first time, the regional network is noting a slight increase in employment in manufacturing. The temporary employment agencies confirm that there is increased demand for labour. There is still a ready supply of labour, but some industries report a lack of highly trained specialists and skilled workers.
• In 2004, annual wage growth is expected to be 3 per cent in manufacturing, 3.0 per cent in service industries and 3.5 per cent in the public sector.
• Prices are on the way up in manufacturing and some retail trade segments. First, the economic recovery is enabling many enterprises to achieve far higher prices, and second, more enterprises are trying to raise their prices because of increased costs. No industries are reporting a decline in prices.
• Profitability is improving throughout the private sector, and most markedly in the export industry, retail trade and services.