Report from Region Inland - October 2003
||September - October 2003|
- Slight increase in volume in moderately expanding markets for manufacturing industry supplying goods for the domestic market. Some industries are struggling, for example the manufacturing sector for building products.
- Most export industries have an optimistic view of the situation following the depreciation of the krone. Changes in employment are relatively small. Some enterprises are still struggling with the after-effects of the strong krone in 2002.
- Most of the firms interviewed in the construction industry have experienced a decline in demand and volume since the spring. Wide variations between different areas, activity in the region as a whole being sustained by the development of the Norwegian military base in Sør-Østerdal.
- Parts of service sector are experiencing higher demand both from the business sector and from households.
- Manufacturing employment is falling somewhat, even though there are a number of enterprises among those interviewed that have expanded in terms of volume. Reasons include weak cyclical developments in Europe, a weak domestic building market and the strong krone in 2002, combined with continued rationalisation and cost-cutting in most enterprises.
- Pay increases for 2003 will be lower than in 2002 for all sectors. Increases are highest in the public sector. Other costs are still showing a moderate increase, with a few exceptions.
- Changes in prices are very moderate in most sectors. Enterprises and industries struggling with a decline in turnover must lower their prices. Price levels are falling in most of the manufacturing sector.
- The supply of labour seems to be increasing, particularly in manufacturing.
- Companies perceive the interest rate reductions as positive due to increasing demand for consumer durables, expectations of increased activity in the construction industry and increased activity in the business sector and the labour market in general. Relatively few enterprises believe, however, that the interest rate reductions have so far boosted demand for their goods and services.
- What effect lower interest rates will have in the short term depends on enterprises' financial position. Costs will be reduced for most enterprises as a result of lower interest rates. There has been little effect on investment, one or two enterprises report that optimal (commodity) stock levels have now increased.