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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.

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