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Industrial confidence for the manufacturing sector moved into negative territory in August and September, according to the FOI Industry Survey. This deterioration appears to be driven by low domestic and export order books, high stocks of finished products and less upbeat production expectations.
Production expectations for the manufacturing sector were negative in August but regained a positive balance in September, although this was the lowest positive balance registered since November 2005. In terms of the main industrial groupings (MIGs), production expectations were negative in August and September for the Consumer Goods Sector. The Intermediate Goods Sector registered negative production expectations in August, but regained positive territory in September. At the same time, the Investment Goods Sector registered positive production expectations in both months quite close to the average for the first nine months of the year.
Overall and export order books deteriorated gradually since last June to reach in September the third lowest levels ever registered since the turn of the year. Total and export order book levels for the three MIGs fell significantly in September when compared to the previous month.
In August, stocks of finished products for the manufacturing sector were reported at the lowest levels ever registered since November 2005 but rose again in September to reach levels in line to those registered in the first seven months of 2006. A substantial increase in stocks of finished products was registered for the Intermediate Goods Sector and the Investment Goods Sector which outweighed lower stock levels for the Consumer Goods Sector.
In September, the manufacturing sector also saw an increase in the number of firms predicting lower selling prices when compared to the previous month. This mainly reflects selling price developments for the Intermediate Goods Sector. On the other hand, during the same month there were more firms in the Consumer Goods Sector predicting to increase selling prices.
With regards to employment expectations, in September there were more firms in the manufacturing sector expecting to decrease their workforce when compared to the previous month. Besides, these negative employment expectations were the worst ever registered since last March. This mainly reflects developments in employment expectations for the Consumer Goods Sector and the Intermediate Goods Sector. On the other hand, employment expectations for the Investment Goods Sector remained unchanged in positive territory. |
