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Report from Region North-West

Summary

• The export industry reports strong growth in volume in the past 3 months. Growth is expected to slow in the next six months, but the level of activity will remain very high. Manufacturing for the domestic market reports solid growth in the past quarter, and expects growth to remain solid for the next six months.
• Activity among suppliers to the petroleum industry continues to increase, but the growth rate has slowed somewhat compared with previous reports. However, new offshore vessels are still being ordered for delivery several years ahead. Further growth is now being curbed by capacity problems among shipyards and their suppliers.
• As reported in the previous round, building and construction are operating at full capacity. Growth has been solid in the past quarter, with substantial demand from manufacturing, the public sector and the housing market. The same solid growth is expected for the next six months, but a shortage of labour is now a major uncertainty factor with respect to further growth.
• Retail trade reports solid growth in the past quarter and expects similar developments in the next six months. Solid growth is reported for the whole services sector, but particularly in corporate services. Growth in these sectors is expected to remain unchanged for the next six months.
• All sectors are planning to increase their investment. Retail trade has the most moderate investment plans.
• Employment growth in the last quarter has been solid in manufacturing, building and construction and service industries. The export industry and suppliers to the petroleum industry report the highest employment growth. However, skilled labour is in very short supply. 91% of the companies report that they would have had some or considerable difficulty in accommodating a further rise in demand.
• Wage growth in 2007 is expected to be about 4.5%, which is slightly higher than reported in the previous round.
• A solid rise in selling prices is reported. Corporate services report the strongest rise, and export industry and retail trade the slowest. Just over 50% of contacts expect a higher rise in prices over the next 12-month period. This is slightly higher than reported in the previous round. Profitability has moved along a positive path in most sectors. Suppliers to the petroleum industry report unchanged profitability in the past period, but their operating margin is already at a very high level. Retail trade also reports unchanged profitability in past period.