National Report Regional Network - October 2003
| Interview round: |
5-2003 |
| Interview period: |
September - October 2003 |
| Responsible: |
Region Innland, Østlandsforskning |
Summary
- Continued high growth in retail trade and the household service sector.
- Bottom perceived to have been reached/ passed both in manufacturing and the corporate service sector.
- Activity in the construction industry has also stabilised, number of new orders edging up.
- Substantial uncertainty about the strength and duration of the upturn.
- Few enterprises in the corporate service sector have so far reported an increase in turnover, but some improvement in profitability due to cost cuts.
- The business sector in general reports that profitability has improved.
- The focus in the business sector appears to have shifted to some extent from cost cutting to strategies for increasing income.
- Both the public and the private sector appear somewhat more positive with respect to investment plans, but are still not signalling any substantial growth in investment over the next year.
- Rationalisation investment still predominant in manufacturing.
- Decline in employment slows, but few report plans to increase employment in either the public or the private sector
- Supply of qualified labour still high and edging up in all sectors.
- Wage growth in 2003 projected at (3.5)% in the private sector and (4.5)% in the public sector.
Focus report - effects on enterprises of interest rate reduction of 4.5 percentage points
- Positive financial expenses in most firms, cost level thereby lowered by interest rate reduction.
- Little evidence of investment plans being changed or moved forward as a result of the interest rate changes. Reduction in required rate of return experienced by large manufacturing firms, however, as a result of lower domestic and international interest rates.
- Turnover in housing market has increased, and housing construction expected to increase to meet higher demand. Little effect on commercial property market.
- Lower interest rates and increased household disposable income have boosted demand for firms providing goods and services to households.
- Lower interest rates and weaker krone exchange rate have strengthened export enterprises and thereby indirectly strengthened regions where the export industry is important.
