Regional network summaries

Print

Region South-West

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

Summary

• The cyclical upturn continues. The activity level among suppliers to the petroleum industry continues to increase. Retail trade had especially strong growth in this round. The export industry and the service sector also report solid growth.
• Growth in the building and construction sector remains moderate, reflecting an especially high initial activity level and indicates that the sector is approaching capacity limits. Growth is also moderate in domestically oriented manufacturing in this round.
• The market outlook for the next six months is positive. All business sectors expect solid growth.
• Investment is expected to increase in all business sectors. Most noteworthy relative to previous rounds is the investment growth in the local government sector. This is a clear indication that the financial position of the the local government sector is currently favourble.
• About half of the businesses think that a shortage of labour may limit their possibilities for expansion. All industries are facing labour supply constraints. The situation is particularly difficult in the building and construction sector.
• Employment is increasing in all industry sectors, including the local government sector. Nearly half of the contacts expect to increase their workforce over the next three months. Only a few will be reducing their workforce. The labour market will remain very tight.
• So early in the year, many of our contacts express some uncertainty about how strong wage growth will be. So far, estimates indicate that annual wage growth will be about the same as last year.
• Prices have risen sharply in the petroleum sector and building and construction. The rise in prices is moderate in some parts of the service sector and domestically-oriented manufacturing. In the export industry, prices are falling, while they remain relatively stable in retail trade. About four out of ten companies expect a sharper price rise in the next twelve months, while three out of ten expect a stable price development compared with the previous year. On the whole, prices are expected to show a somewhat sharper rise than in the previous round.
• Profitability will remain stable or positive in all business sectors.