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Stronger order books combined with production increases expected for the first three months of 2006 improved the outlook of local manufacturing operators for the month of December. During the same month, stocks of finished products were registered at ‘above normal’ levels but at a lower extent than the levels registered in November. In parallel, the FOI Industry Survey registered a strengthening Industrial Confidence in December 2005.
A breakdown by Industrial Groupings shows that, in December, the Intermediate Goods Sector registered an overall marked improvement in overall and export order books compared to the previous month. A much more conservative improvement for order books was also registered for the Consumer Goods Sector. Concurrently, the Investment Goods Sector registered deterioration in overall order books but slightly stronger export order books.
The Consumer Goods Sector and the Intermediate Goods Sector have also registered more positive production expectations and lower levels of stocks of finished products compared to November. On the other hand, production expectations for the Investment Goods Sector weakened whilst stocks of finished products registered no change throughout the same period.
In terms of price expectations, there were more manufacturers in December, compared to the previous month, predicting a fall in selling prices. This is mainly attributed to more negative price expectations in the Intermediate Goods Sector and the Consumer Goods Sector that offset a minor improvement in selling price expectations registered for the Investment Goods Sector.
Employment expectations
With regards to employment expectations, there were significantly less manufacturing firms in December expecting to decrease their total employment over the following quarter when compared to November survey results. This reflects a noticeable improvement in employment expectations for the Intermediate Goods Sector, which offset a marked deterioration in employment expectations for the Consumer Goods Sector and a no change scenario for the Investment Goods Sector.
Methodology
The December Industry Survey was carried out between the 9 and the 29 of December 2005. 212 manufacturers, employing around 12768 employees, replied to the survey.
The FOI will continue to monitor the outlook of manufacturing industry through its surveys on a monthly basis. It aims to provide the forum through which manufacturing firms can identify and hopefully address issues of common concern emerging from such surveys. |
