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Report from Region South-West

Summary

• The upturn continues. In this round of interviews, corporate services and retail trade report particularly strong growth.
• The activity level among suppliers to the petroleum industry remains high. Domestically oriented manufacturing, building and construction and household services are also characterised by solid growth.
• The market outlook for the next six months is positive. All sectors are expecting growth. The export industry is expecting the slowest growth.
• Increased investment is expected in all industries except retail trade.
• Three of four contacts believe that labour shortages may limit opportunities for expansion. All sectors are facing constraints related to labour shortages. The situation is still particularly difficult in the building and construction sector.
• Employment is rising in all industries, including the local government sector. Nearly half of the contacts expect to increase their workforce during the next three months. Only three of forty contacts will reduce their workforce. The labour market will remain very tight.
• Expectations indicate that annual wage growth will be approximately the same or marginally higher than in 2006.
• Prices continue to rise considerably, although the rise in prices is somewhat lower than in the previous round in the service sector and in building and construction. Prices are relatively stable in the export industry and retail trade.
• Roughly three of ten companies are expecting prices to rise at a faster pace during the next 12 months, whereas five of ten are expecting prices to rise at the same pace as last year. On the whole, expectations of a rise in prices are somewhat lower than in the previous round.