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Region South-West

Summary

• The upturn continues in Region South-West with solid to strong growth in all industries. Growth is expected to remain at the same level or fall moderately in the period ahead.
• In this round, the export industry, suppliers to the petroleum industry and household services in particular report strong growth in demand.
• Demand remains strong in retail trade and corporate services, as in the previous round. Growth in demand remains solid in domestically oriented manufacturing and building and construction.
• Overall investment is expected to increase. Domestically oriented manufacturing plans a substantial increase in investment, whereas the service industry expects investment to remain stable.
• Roughly 70% of the enterprises report some or considerable capacity problems.
• Approximately 60% of the enterprises report that a lack of qualified labour is limiting their possibilities of expansion. The problems are most pronounced in building and construction and the public sector. Of the 40% who respond that the labour supply is not a problem, a number report that it may soon become a problem.
• All industries except retail trade have increased employment in the past three months and expect equally high or higher employment growth in the next three month period. Oil-related industry expects the strongest growth in employment.
• Continued high wage growth reflects the tight labour market. Building and construction and manufacturing, where engineers in particular are receiving historically high wage increases, expect the highest annual wage growth in 2007.
• In this round, there has been a considerable increase in prices for inputs other than raw materials. Our contacts also report that prices for travel, IT services and shipyard services have risen.
• The rise in selling prices has been considerable. Expectations concerning price increases ahead are somewhat lower than in the previous round. However, enterprises' expectations vary considerably.
• The profitability trend is positive for all industries except domestically oriented manufacturing where profitability is stable. Profitability growth is stable or slowing in all industries except building and construction where it has picked up since the previous round.