Decline in manufacturing for 2020

Published:

The latest investment from companies within oil and gas, manufacturing, mining and quarrying and electricity supply show a clear decline in 2020. Lower investment in manufacturing is the main reason for the overall decline. Updated investment estimates for 2021 still indicate a clear decline in total investments.

Written by: Edvard Andreassen

The investment survey conducted in November suggest that total investments within oil and gas, manufacturing, mining and quarrying and electricity supply in 2020 will amount to NOK 251,0 billion. This is 2.4 per cent lower than the corresponding figure for 2019, given in November last year. The decline is mainly due to significantly lower investments in manufacturing, while investments in electricity supply and oil and gas activities are likely to end at about the same level as in 2019.

Figure 1. Estimated investments collected in 4th quarter same year

Extraction and pipeline transport Manufacturing, mining and quarrying Electricity supply, gas and steam
2010 139384 19954 14467
2011 159388 20091 17297
2012 186843 20489 19356
2013 221289 20885 20674
2014 228241 21543 21916
2015 204297 20970 23597
2016 170280 22518 27123
2017 150842 21687 32688
2018 155457 24978 41112
2019 182929 33902 39939
2020 182500 28486 39601

Companies’ latest investment estimates for 2021 indicate a sharp decline of 9.0 per cent lower compared to the same figure for 2020 given in November last year. The decrease in 2021 is driven by a sharp fall in investment within the oil and gas industry, but both manufacturing and electricity supply also contribute in a negative direction. For more detail about investments within the oil and gas industry, please see the see the following article.

According to seasonally-adjusted figures, quarterly final investment had the following development from the second to the third quarter of 2020:

  • Oil and gas: -2,6 %
  • Manufacturing: 2.0 %
  • Electricity supply: -9.6 %

Figure 2. Final investments per quarter. Seasonally adjusted. 2005=100

Manufacturing Electricity supply, gas and steam Extraction and pipeline transport
Q3-2010 89.8 187.1 133.2
Q4-2010 99.4 178.1 144.7
Q1-2011 98.3 197.5 156.3
Q2-2011 99.2 204.1 161.1
Q3-2011 107.9 188.4 176.9
Q4-2011 104.5 214.5 183.4
Q1-2012 111 218.5 188.5
Q2-2012 109.3 206.8 195.9
Q3-2012 98.4 235 194.1
Q4-2012 106.1 245.3 214.9
Q1-2013 100.6 223.2 224.4
Q2-2013 110.7 234.7 235.9
Q3-2013 108 245 253.3
Q4-2013 103.5 253 253.1
Q1-2014 111.7 258.7 255.4
Q2-2014 112.3 275.8 253.3
Q3-2014 112.1 246.2 249.1
Q4-2014 117.8 248.5 237.1
Q1-2015 100.2 263.3 242.8
Q2-2015 103.9 269.4 230
Q3-2015 116.9 265.5 216.6
Q4-2015 108.4 288.6 203.5
Q1-2016 127.5 309.3 192
Q2-2016 123.8 287.1 186.9
Q3-2016 124.4 313.2 179.1
Q4-2016 129 323.5 171
Q1-2017 121.1 369.7 171
Q2-2017 110.3 313.4 170.4
Q3-2017 110.7 415.1 152.5
Q4-2017 123.1 376.1 165.3
Q1-2018 121.3 424.1 154.3
Q2-2018 133.7 473.4 161.8
Q3-2018 134 489.2 170.7
Q4-2018 137.7 479.5 183.2
Q1-2019 158.7 431.3 183.7
Q2-2019 164.4 444.3 192.3
Q3-2019 184.3 475.3 200
Q4-2019 171.1 475.8 208.9
Q1-2020 160.5 433.5 213.2
Q2-2020 138.6 511.2 195
Q3-2020 141.4 462.3 189.9

The seasonal adjustment routine has been adjusted during the Corona-crisis

Thursday the 12th of March 2020 the Norwegian government introduced actions against the spreading of the Corona-virus in Norway. This has led to a change in the investment pattern compared to what we usually observe. Hence, the seasonal adjustment routine during the Corona- crisis is done in such a way that the figures during the crisis (the 1st quarter), are not included in the basis for the calculation of the seasonal pattern. Technically, in the seasonal adjustment routine this is done by specifying the 1st quarter as an outlier.

This means that the usual trend will not be calculated and instead will be trend and seasonally adjusted follow each other. An important exception is the last observation, where the trend figure calculated in the seasonal adjustment routine will only be a projected value and the last observation is not included. The trend figure from the 1st quarter of 2020 and later, is therefore difficult to interpret.

The seasonal adjustment routine of Statics Norway is in line with the recommendations of Eurostat.

Read also on ssb.no