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.

This is that the new single-currency, euro, markets develop trading practices and standards of conduct, and the necessary infrastructure, that will genuinely facilitate integration. In terms of infrastructure, for example, real-time, same-day wholesale payments are essential to tie together money market activity conducted in different centres in the same instrument in the single currency; and similarly, linkages may also need to be considered between different settlement systems. Common trading practices, and market conventions, will also need to be developed. The lead here lies in many cases with market participants themselves, and with the systems they have developed to serve their trading needs. But it is a process we are very familiar with in London, where we have sought when necessary to encourage just such common initiatives in order to enhance the effectiveness of international trading activity in London. And with an eye on EMU, we have encouraged trading activity in the ECU, particularly in the money markets: hence, for example, the regular programme of monthly auctions for UK government ECU treasury bills, and the quarterly auctions of UK government three-year ECU notes, which have been running for some years. Because of the international flavour of our markets, and because we are conscious that these markets will want to trade the full range of euro instruments in London, we will continue to support initiatives aimed at achieving the necessary market structure where we feel we can make a contribution. Reforms in the London markets  BIS Review 110/1997  -7-  35.