Regional network summaries

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Region North-West

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

Summary

• Domestically oriented manufacturing reports high volume growth on the whole, and also expects solid growth in the next six months. As previously reported, it is especially manufacturing supplying the offshore industry that reports solid and in generally strong growth, but also industries supplying goods and services to building and construction and fish farming are experiencing solid growth. The food industry is facing a period of tough competition and moderate growth. The export industry is still experiencing solid growth, but growth is expected to slow somewhat in the next six months.
• Growth in demand in the petroleum sector will continue to increase and the period of further growth is expected to be longer than earlier. New offshore vessels are contracted for delivery up to 2010. Capacity problems in shipyards are currently constraining further growth.
• Building and construction is operating at full capacity utilisation and with extensive use of contract labour. There is high demand from manufacturing, the public sector and the residential construction industry. There are signs that the growth will level off in the next six months because of a shortage of labour.
• Retail trade reports solid growth in the past quarter and expects a similar development in the next six months. Competition is intense and the rise in prices is moderate. There is still solid growth in both the corporate and household service sectors. Growth is expected to remain steady in these sectors in the next six months.
• There are plans for increased investment in all industry sectors, but the highest increases will be in the service sector and the public sector.
• There was employment growth in all industry sectors except building and construction in the previous period. A shortage of labour has been the constraint here. Employment growth has been highest in manufacturing. However, there has been a considerable shortage of skilled labour – especially engineers and project managers – in manufacturing as well. About 70 per cent of the companies respond that they would have had some or considerable problems meeting an increase in demand. This is a somewhat lower percentage than reported in the previous round, but this may be due to the sample.
• Wage growth in 2007 is expected to be around 4 per cent, which is slightly lower than in November 2006. However, many contacts are extremely uncertain about their estimates and are concerned that actual growth will be somewhat higher. Combined with concerns about a stronger krone, this represents a major source of uncertainty with regard to future profitability for the traditional export industry,.
• The overall rise in prices in the previous year has been relatively high, especially in building and construction, domestically oriented manufacturing and corporate services.
• Profitability has improved for all sectors, but as previously, suppliers to the petroleum industry in particular have recorded the highest profitability gains.