Information from the regional network is a useful supplement when assessing the current economic situation. Region South reports high growth in activity in all industries. The market outlook is positive and more broadly based than previously. Growth in the export industry and the construction sector is expected to remain solid, although somewhat weaker than earlier. On the other hand, there is now more optimism in the retail trade and service sectors. Capacity utilisation varies across industries. There is little excess capacity in the construction sector. Skilled labour in particular is in short supply. There is some excess manufacturing capacity, while considerable excess capacity is reported in retail trade and services. The export industry is expecting a slower rise in prices for export products next year, while in general a stable rise in prices is expected in other industries. Profitability is increasing, particularly in manufacturing for the domestic market, the construction sector and service industries. Developments in employment show a mixed picture. Manufacturing employment is rising at a solid pace, while the level of employment is stable in the other sectors. Growth in the global economy will have an impact on developments in the Norwegian economy in the period ahead. Global growth is expected to moderate somewhat this year and stabilise in the years ahead. In the US, growth seems to have remained solid in the first quarter. Heightened uncertainty with regard to developments in the US economy and weaker results for some large companies have resulted in falling prices on world stock exchanges.
So far this year, the price of Brent Blend oil has largely moved between USD 45 and 55 per barrel. In the past few weeks, it has hovered around USD 50 per barrel. Oil futures have also increased. Little excess production capacity in OPEC countries, combined with the prospect of lower production in non-OPEC countries, has probably influenced oil prices. At the same time, there are prospects of continued strong demand growth in important oil-importing countries, such as China and some other emerging economies. The IMF has analysed supply and demand in the oil market for the period ahead in the latest issue of "World Economic Outlook": With price expectations at around the current level and global GDP growth at approximately 3 per cent, demand for oil is expected to increase by around 2 per cent per year over the coming decades up to 2030. The rise primarily reflects higher demand for fuel for motor vehicles, particularly in non-OECD countries. An increase in per capita income in China will in particular lead to a sharp increase in car use. Output in non-OPEC countries will peak soon – in 5 years, according to IMF estimates. Higher demand will thus require higher output in OPEC countries. These countries have substantial oil resources, but are currently producing close to capacity. Production capacity must therefore be increased. Higher demand can thereby be met by non-OPEC oil producers operating at full capacity while OPEC passively accommodates any remaining demand by increasing its production capacity.