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Region Inland

Interview round:  1-2007
Interview period: January and February 2007

Summary

• On the whole, there was solid growth in demand and output in Region Inland during the period.
• Growth in building and construction is somewhat weaker than in the previous round, partly reflecting capacity constraints.
• Manufacturing reports relatively strong growth. Growth is strongest for suppliers to the building sector and the export industry, e.g. the engineering industry. The service sector is growing faster than in the previous round and growth is strongest in banking, consulting and temporary staff recruitment agencies.
• The market outlook is still good for all business sectors in Region Inland; they are roughly the same as in the previous round. The growth outlook is best in the service sector and the export industry. In building and construction, residential construction is expected to level off, but an increase is expected in public sector building and commercial buildings. Our contacts in the private sector expect somewhat slower overall growth in the period ahead.
• The investment level is dropping markedly in retail trade and the service sector, while it is rising somewhat in manufacturing and in the local government sector.
• The percentage of companies that report that they would have had some or considerable problems meeting an expected or unexpected growth in demand has risen in all of the last four rounds and is now at 66 per cent. The increase is greatest for manufacturing, retail trade and the local government sector.
• 56 per cent respond that labour availability is a constraint on output. This is somewhat higher than in the previous two rounds. As earlier, the highest percentages of companies that cite labour availability as a constraint are in building and construction and the service sector.
• Employment is edging up in manufacturing and local government, while it is increasing somewhat faster in the service sector and building and construction. Roughly the same development is expected in the period ahead, except that employment in manufacturing will stabilise.
• The estimate for wage growth is 4-4.5 per cent, which is higher than that expected in corresponding round in 2006.
• On the whole, price rises are at roughly the same level as in the previous round, but they are somewhat lower in household services and higher in the export industry and retail trade. Price rises are highest for building and construction and corporate services.
• Slightly more companies expect higher as opposed to lower price rises in the next 12 months, 34 as opposed to 29 per cent. However, the expectations of higher price rises are somewhat less pronounced than in the previous round.
• Profitability is increasing for most industry sectors, most markedly for domestically-oriented manufacturing and the service sector.