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National Report for Regional Network - March 2005

Summary

• All industries report solid growth in this round of interviews. Petroleum-related manufacturing, the export industry, building and construction as well as corporate services report strong growth. Retail trade and household services report solid growth. The growth rate for these business sectors is slowing somewhat compared with the last round.
• All industries are expecting solid growth during the next six months. In the service sector, growth is expected to be most pronounced for enterprises providing services to the corporate sector. Petroleum-related manufacturing expects strong growth in the period ahead.
• In this round, less than 40 per cent of the companies interviewed reported that meeting an increase in demand would be a problem. Capacity constraints are most pressing in the building and construction sector. In this sector, sixty per cent of the companies reported problems of this kind. The comparable figure for manufacturing is 40 per cent. Labour shortages and a shortage of real capital are responsible for capacity constraints.
• Both the private and public sectors report moderate growth in investment. A substantial share of manufacturing investment is now being used to increase capacity.
• Employment has increased moderately in manufacturing, building and construction and retail trade. The entire private sector expects moderate employment growth during the next three months.
• Annual wage growth in 2005 is projected at 3.6 per cent. This is 0.3 per cent higher than the projection for wage growth in 2004 made at this time last year.
• All industries report a moderate increase in prices during the last 12 months. Retail trade is the exception and reports that prices have remained unchanged. The increase in prices is most pronounced in building and construction. All sectors report that profitability continued to improve during the last period.