Regional network summaries

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Region South

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

Summary

• Manufacturing reported moderate growth, or a somewhat lower growth rate than in the autumn and winter of 2006. Suppliers to the petroleum industry also report slower growth now than one year earlier because more and more businesses in manufacturing are producing at full capacity utilisation. Growth in building and construction, retail trade and the service sector is solid and on a par with the previous round.
• The majority of our contacts also expect the same growth 6 months ahead. A minority expect a somewhat slower rate of growth because the initial activity level is now higher. Business and industry are optimistic about the future even though several business sectors are concerned about shortages of sough-after technical expertise.
• In manufacturing and the service sector, the rate of investment is moderate. In the local government sector, investment seems to be edging down. Because of pressures in the building and construction sector and a shortage of materials, budgeted local government projects will be postponed.
• Capacity utilisation in Region South is about the same now as in the autumn and winter of 2006, but capacity problems have clearly increased in scope within some manufacturing sectors. The biggest capacity problems are still in building and construction.
• Employment continues to increase. Although growth is highest in the private sector, the improvement in local government finances has also had a positive effect on employment.
• Annual wage growth is expected to range between 4-6 per cent.
• Selling prices show solid growth, slightly stronger growth than in the previous round. Selling prices have risen most among suppliers to the petroleum industry, the shipbuilding industry and business services. Next year, 59 per cent expect an unchanged rise in prices and 29 per cent expect a higher rise in prices.