Regional network reports 4-2007

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Region North-West

Summary

• Domestically oriented manufacturing in Region North-West has exhibited solid growth in volume in the last three months, and the growth rate is expected to remain solid for the next six months. The export industry reports strong growth in the past three months, and expects growth to remain solid during the next six months.
• Suppliers to the petroleum industry report that activity is still at a very high level. They report that the last quarter's growth in volume has been strong and that they expect continued solid growth during the next six months. Building and construction reports moderate growth in the past quarter, but expects solid growth during the next half year.
• The retail sector reports solid growth during the past three months and expectations that it will continue thus during the next six months. The service sector reports solid growth for both household and corporate services in the past quarter. Service industry growth during the next six months is expected to be a little slower, on balance, but to remain solid.
• 82% of the companies report that they would have had some or considerable problems in accommodating a rise in demand. This applies in particular to companies in building and construction and manufacturing. There are reports of major problems in procuring qualified labour, particularly in building and construction and manufacturing.
• All sectors report intentions to increase investment in the immediate future. As previously reported, offshore shipbuilders are planning the largest increases.
• Employment has increased in all sectors except the public sector, and is expected to increase further in the period ahead in the same sectors.
• The average projection for annual wage growth in 2007 is 5½ - 6%. This is over one percentage point higher than reported a year ago. Wage growth is expected to be particularly strong in manufacturing.
• Our contacts report a continued solid rise in selling prices. Prices have risen in all sectors, but most in corporate services. The share of contacts that expect prices to rise at a faster pace during the next 12 months is now 36%, an increase of 6 percentage points compared with the previous round.
• Operating margins have improved generally for all sectors except retail trade. The offshore industry reports the most positive developments.