Regional network reports 4-2007

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Region South

Summary

• Activity continues to increase in all industries. Growth is strongest among suppliers to the petroleum industry and in retail trade. Manufacturing reports large order backlogs, particularly in the offshore segment.
• The market outlook is positive, and the growth rate is expected to remain solid during the next six months. However, the strong Norwegian krone and the possibility that it may weaken their market position is creating uncertainty in the export industry.
• Both manufacturing and the local government and hospital sectors plan to increase investment in the next twelve months compared with the level over the past year. Investment in retail trade and service industries is stable. Investments are being made in capacity expansion, upgrading of production equipment, product development and rationalisation measures. The areas in focus in the local government sector are youth, care and culture.
• Capacity problems are increasing steadily. 45% of companies report that they would have some or considerable problems in accommodating an increase in demand. This is somewhat higher than in the winter. Capacity utilisation is increasing in retail trade and services.
• There has been pronounced employment growth in building and construction. In manufacturing and retail trade, employment growth is reported as being somewhat lower than in the previous round. Developments in the local government and hospital sector are stable.
• Annual wage growth is expected to be between 5% and 6%.
• All in all, industries report a solid rise in prices. particularly in building and construction and domestically oriented manufacturing. Next year, 36% of companies expect a higher rise in prices and 6% a slower rise.