Decline in manufacturing output continues

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Norwegian manufacturing output saw a decline of as much as 3 per cent from April to May 2020, according to seasonally adjusted figures. The activity in May was still heavily affected by the Corona-situation. In the period March-May 2020 there was a severe output decline of 5.2 per cent compared with the last three-month period.

The index level for Norwegian manufacturing in the period March -May 2020 amounted to 113.1 (2005=100). The corresponding figure for the previous three-month period was 119.3. Figure 1 shows that the development in seasonally-adjusted figures has been relatively stable the last year, before the output drops significantly from March 2020.

Since March, April and May 2020 are specified as outliers in the seasonal adjustment routine, the latest trend figures are not representative for the actual development. Hence, the trend figures for 2020 are not included in figure 1. For more details, see the information box regarding the Covid-19 virus by the end of the article.

Figure 1. Production development in manufacturing. Seasonally adjusted and smoothed seasonally adjusted figures. 2005=100

Smoothed seasonally adjusted Seasonally adjusted
Jan. 2015 123.7 122.4
Feb. 2015 122.7 122.6
Mar. 2015 121.8 126.8
Apr. 2015 120.9 121.4
May. 2015 120.2 119.0
June. 2015 119.5 120.1
July. 2015 118.9 115.2
Aug. 2015 118.2 118.1
Sep. 2015 117.6 118.8
Oct. 2015 116.9 115.8
Nov. 2015 116.3 116.8
Dec. 2015 115.8 115.3
Jan. 2016 115.4 115.1
Feb. 2016 115.1 115.5
Mar. 2016 114.8 117.9
Apr. 2016 114.5 114.3
May. 2016 114.1 114.8
June. 2016 113.6 112.6
July. 2016 113.1 113.8
Aug. 2016 112.6 109.9
Sep. 2016 112.4 112.3
Oct. 2016 112.4 112.1
Nov. 2016 112.6 112.2
Dec. 2016 113.0 112.7
Jan. 2017 113.5 114.3
Feb. 2017 113.9 114.2
Mar. 2017 114.2 114.1
Apr. 2017 114.4 114.2
May. 2017 114.4 114.3
June. 2017 114.3 114.3
July. 2017 114.3 114.7
Aug. 2017 114.4 110.6
Sep. 2017 114.4 114.1
Oct. 2017 114.5 114.2
Nov. 2017 114.6 114.8
Dec. 2017 114.7 115.9
Jan. 2018 114.8 113.9
Feb. 2018 114.8 114.6
Mar. 2018 114.8 115.0
Apr. 2018 114.9 115.3
May. 2018 115.1 114.7
June. 2018 115.5 115.4
July. 2018 115.8 115.9
Aug. 2018 116.3 116.6
Sep. 2018 116.8 116.1
Oct. 2018 117.4 117.7
Nov. 2018 117.8 118.0
Dec. 2018 118.2 118.6
Jan. 2019 118.5 118.4
Feb. 2019 118.9 118.3
Mar. 2019 119.2 117.0
Apr. 2019 119.5 119.9
May. 2019 119.6 120.2
June. 2019 119.7 119.1
July. 2019 119.7 120.2
Aug. 2019 119.6 118.9
Sep. 2019 119.5 119.7
Oct. 2019 119.4 119.7
Nov. 2019 119.4 119.2
Dec. 2019 119.3 119.2
Jan. 2020 119.7
Feb. 2020 119.1
Mar. 2020 115.5
Apr. 2020 113.6
May. 2020 110.2

According to seasonally-adjusted figures, manufacturing output saw a decline of 3 per cent from April to May 2020. This decline follows after a decrease of 1.6 per cent from March to April. The decline in May was particularly related to export-related manufacturing. The industry grouping refined petroleum, chemicals and pharmaceuticals contributed the most to the overall manufacturing decline with an output drop of as much as 14 per cent. The fall was particularly related to low production of pharmaceutical products. Low global demand due to the Corona-situation explains the reduced production level. In addition, non-ferrous meals also saw a clear fall of 9.6 cent, partly due to the decline in the European automotive industry. 

On the other hand, the activity within the industry grouping furniture and manufacturing n.e.c., as well as in building of ships, boats and oil platforms saw signs of recovery. The former experienced a substantial output growth of 29.5 per cent, while the latter went up with 4.7 per cent.  The growth in these industries can be seen in context with less strict infection control rules.

Figure 2. Selected industries in manufacturing. Seasonally adjusted, monthly change. May 2020 / April 2020

Monthly percentage change
Furniture and manufacturing n.e.c. 29.5
Ships, boats and oil platforms 4.7
Non-ferrous metals -9.6
Refined petro., chemicals, pharmac. -13.6

Three-month change: historical drop in manufacturing output

According to seasonally-adjusted figures, manufacturing output saw a clear decline of as much as 5.2 per cent in the period March –May 2020 compared with the previous three-month period. This is the largest output drop registered for a three-month period in this time series which goes back to 1990. The steep fall is due to the fact that all three months in this period have seen low production levels as a result of the Corona-situation. Ships, boats and oil platforms contributed the most to the decline in this period with a substantial drop of as much as 30 per cent.

On the other hand, food products dampened the overall output decline with a solid production increase in this period. The growth must be seen in context with high demand from the Norwegian grocery sector.

Monthly change: Large output drop in the Euro area in April 2020

Estimated figures from Eurostat, the EU’s statistical office, indicate that manufacturing output in the Euro area fell by as much as 18 per cent from March to April 2020. This strong output decline was caused by the actions taken to mitigate the spread of the Covid-19 virus. Production of durable consumer goods, such as automobiles, saw the strongest output decline, followed by investment goods. Large European manufacturing countries such as Germany, France and Italy all saw an output decline of more than 20 per cent.

In the same period, Norwegian manufacturing went down with 1.6 per cent. In two of our neighboring countries, Sweden experienced a severe drop of as much as 17 per cent, while Denmark had a decline of 4.5 per cent.

For more information on the development in European manufacturing sector in April, see this article from Eurostat.

Figure 3. Index of production for manufacturing. Euro area and Norway (2015=100). Seasonally adjusted

Euro area Norway
Jan. 2015 97.6 102.5
Feb. 2015 99.6 102.7
Mar. 2015 100.5 106.3
Apr. 2015 99.9 101.7
May. 2015 100.2 99.7
June. 2015 100.7 100.6
July. 2015 100.7 96.5
Aug. 2015 99.7 99.0
Sep. 2015 100.2 99.5
Oct. 2015 99.9 97.0
Nov. 2015 100.1 97.9
Dec. 2015 100.9 96.6
Jan. 2016 103.9 96.4
Feb. 2016 101.4 96.7
Mar. 2016 100.3 98.8
Apr. 2016 101.7 95.8
May. 2016 100.3 96.2
June. 2016 101.6 94.3
July. 2016 101.3 95.4
Aug. 2016 101.5 92.1
Sep. 2016 101.5 94.1
Oct. 2016 102.7 93.9
Nov. 2016 103.2 94.0
Dec. 2016 102.8 94.4
Jan. 2017 102.1 95.8
Feb. 2017 103.1 95.7
Mar. 2017 103.2 95.5
Apr. 2017 104.1 95.7
May. 2017 104.3 95.7
June. 2017 103.9 95.8
July. 2017 105.6 96.1
Aug. 2017 106.1 92.6
Sep. 2017 105.9 95.6
Oct. 2017 105.7 95.7
Nov. 2017 108.6 96.2
Dec. 2017 108.8 97.1
Jan. 2018 107.5 95.4
Feb. 2018 105.3 96.0
Mar. 2018 105.3 96.3
Apr. 2018 105.9 96.6
May. 2018 107.2 96.1
June. 2018 107.0 96.7
July. 2018 105.7 97.1
Aug. 2018 106.8 97.7
Sep. 2018 106.3 97.2
Oct. 2018 106.4 98.6
Nov. 2018 105.3 98.8
Dec. 2018 105.2 99.3
Jan. 2019 105.9 99.1
Feb. 2019 106.1 99.1
Mar. 2019 105.6 98.0
Apr. 2019 105.2 100.4
May. 2019 105.7 100.8
June. 2019 104.5 99.8
July. 2019 104.4 100.7
Aug. 2019 104.4 99.6
Sep. 2019 104.8 100.2
Oct. 2019 104.4 100.2
Nov. 2019 103.8 99.8
Dec. 2019 102.1 99.8
Jan. 2020 104.2 100.2
Feb. 2020 104.2 99.8
Mar. 2020 90.7 96.7
Apr. 2020 74.0 95.2

Three-month change: increase in extraction of crude petroleum and electricity supply

According to seasonally-adjusted figures, the total production index (PII) covering extraction, mining, manufacturing and electricity supply saw an increase of 1.4 per cent in the period March –May 2020 compared with the previous three-month period. Extraction of crude petroleum had a clear growth of 9.5 per cent, while extraction of natural gas decreased by 2.4 per cent. The oil and gas production was not significantly affected by the Corona-situation in the period March-May 2020. The growth in oil and gas extraction in this period can partly be related to the opening of a new oil field in the autumn of 2019. For more details about oil and gas extraction in this three-month period, see the press release from The Norwegian Petroleum Directorate.

Within support activities for petroleum and natural gas extraction, there was a severe output drop of 13 per cent in the period March –May 2020 compared with the previous three-month period. Strict infection control rules combined with the low oil price and reduced exploration on the Norwegian continental shelf explains the low activity level.

In the same period, mining and quarrying saw an increase of 6 per cent, while Norwegian electricity supply increased by more than 24 per cent. The strong production level within electricity supply can partly be explained by increased production of hydro power in order to make room in the reservoirs for melting snow.

1 The index value for period m is the average of period m, m-1 and m-2.

Figure 4. Production development. Seasonally adjusted. Three-month moving average¹. 2005=100

Manufacturing Extraction, mining, manufacturing and elec. Extraction and related services
Jan. 2010 109.4 92.3 85.1
Feb. 2010 109.7 92.0 84.7
Mar. 2010 110.1 91.6 84.4
Apr. 2010 110.8 90.9 83.8
May. 2010 110.3 90.3 83.6
June. 2010 111.1 89.3 82.2
July. 2010 111.8 88.1 80.4
Aug. 2010 112.0 84.9 75.7
Sep. 2010 111.7 83.6 73.7
Oct. 2010 111.4 84.8 75.3
Nov. 2010 112.6 87.4 77.9
Dec. 2010 112.6 89.1 80.0
Jan. 2011 112.7 87.7 78.4
Feb. 2011 112.6 87.0 77.9
Mar. 2011 113.1 85.8 76.5
Apr. 2011 112.9 84.7 74.9
May. 2011 113.0 82.3 71.1
June. 2011 111.7 81.7 70.0
July. 2011 110.2 81.9 69.7
Aug. 2011 109.6 84.3 72.6
Sep. 2011 110.9 85.6 74.2
Oct. 2011 112.9 86.1 74.5
Nov. 2011 113.8 86.4 74.7
Dec. 2011 113.5 85.3 73.6
Jan. 2012 113.9 86.6 74.8
Feb. 2012 113.9 87.3 75.1
Mar. 2012 114.0 88.4 75.8
Apr. 2012 113.7 88.4 75.5
May. 2012 114.4 88.5 75.5
June. 2012 114.8 88.9 76.0
July. 2012 115.3 88.0 75.1
Aug. 2012 115.7 87.3 74.0
Sep. 2012 116.3 85.0 70.4
Oct. 2012 116.8 85.2 70.4
Nov. 2012 116.8 84.3 69.3
Dec. 2012 116.7 85.3 70.9
Jan. 2013 117.2 83.8 70.1
Feb. 2013 117.7 82.4 69.3
Mar. 2013 118.0 80.7 68.4
Apr. 2013 118.8 81.1 68.9
May. 2013 119.0 82.8 71.1
June. 2013 120.4 84.0 72.4
July. 2013 120.8 85.1 73.6
Aug. 2013 121.1 84.5 72.8
Sep. 2013 120.8 83.9 72.1
Oct. 2013 120.3 81.6 69.4
Nov. 2013 120.1 81.5 69.3
Dec. 2013 120.2 82.0 69.9
Jan. 2014 120.7 83.7 71.5
Feb. 2014 121.3 84.3 71.8
Mar. 2014 121.9 85.2 72.3
Apr. 2014 121.9 85.4 72.3
May. 2014 122.2 84.2 70.2
June. 2014 123.0 83.9 69.4
July. 2014 123.6 83.6 68.8
Aug. 2014 125.2 84.7 70.2
Sep. 2014 124.5 85.7 71.8
Oct. 2014 125.4 87.2 73.6
Nov. 2014 124.6 87.7 74.4
Dec. 2014 125.4 87.4 73.7
Jan. 2015 124.1 86.1 72.4
Feb. 2015 123.4 86.1 72.7
Mar. 2015 123.9 86.3 72.9
Apr. 2015 123.6 85.4 71.7
May. 2015 122.4 84.9 71.3
June. 2015 120.2 85.0 72.0
July. 2015 118.1 86.2 74.2
Aug. 2015 117.8 87.0 75.4
Sep. 2015 117.4 87.9 76.7
Oct. 2015 117.6 88.1 77.1
Nov. 2015 117.1 87.3 76.2
Dec. 2015 116.0 85.4 74.1
Jan. 2016 115.7 85.2 73.7
Feb. 2016 115.3 85.3 73.9
Mar. 2016 116.2 85.7 73.7
Apr. 2016 115.9 86.1 74.2
May. 2016 115.7 86.4 74.7
June. 2016 113.9 85.3 73.8
July. 2016 113.7 84.9 73.5
Aug. 2016 112.1 83.2 71.8
Sep. 2016 112.0 81.9 70.1
Oct. 2016 111.4 82.4 71.0
Nov. 2016 112.2 83.9 73.0
Dec. 2016 112.3 85.8 75.4
Jan. 2017 113.1 85.7 74.3
Feb. 2017 113.7 85.9 73.6
Mar. 2017 114.2 87.0 74.2
Apr. 2017 114.2 87.2 74.5
May. 2017 114.2 87.2 74.3
June. 2017 114.3 87.1 73.8
July. 2017 114.4 86.9 73.4
Aug. 2017 113.2 87.0 73.9
Sep. 2017 113.1 87.5 74.8
Oct. 2017 113.0 86.9 74.0
Nov. 2017 114.4 86.1 72.4
Dec. 2017 115.0 84.9 70.4
Jan. 2018 114.9 85.9 70.8
Feb. 2018 114.8 86.9 71.1
Mar. 2018 114.5 87.8 71.2
Apr. 2018 115.0 87.3 70.4
May. 2018 115.0 86.4 69.5
June. 2018 115.1 86.9 70.9
July. 2018 115.3 87.3 71.5
Aug. 2018 116.0 88.6 73.2
Sep. 2018 116.2 88.3 72.4
Oct. 2018 116.8 88.8 72.2
Nov. 2018 117.3 87.9 70.5
Dec. 2018 118.1 87.3 69.1
Jan. 2019 118.3 85.9 68.2
Feb. 2019 118.4 84.7 67.4
Mar. 2019 117.9 83.3 66.7
Apr. 2019 118.4 82.6 65.8
May. 2019 119.0 82.8 65.6
June. 2019 119.7 82.5 64.7
July. 2019 119.8 82.4 64.2
Aug. 2019 119.4 81.5 63.0
Sep. 2019 119.6 81.5 62.5
Oct. 2019 119.4 81.9 63.4
Nov. 2019 119.5 83.6 66.0
Dec. 2019 119.4 85.5 69.4
Jan. 2020 119.4 85.9 70.9
Feb. 2020 119.3 86.3 71.9
Mar. 2020 118.1 86.7 72.7
Apr. 2020 116.1 87.6 73.6
May. 2020 113.1 87.5 73.7

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

Thursday 12th of March 2020 the Norwegian government introduced actions against the spreading of the Corona-virus in Norway. Several manufacturing establishment have been affected by these measures, and this has led to a change in the activity 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 (from March), are not included in the basis for the calculation of the seasonal pattern. Technically, in the seasonal adjustment routine this is done by specifying March and following months as outliers.

This implies that normal trend figures will not be calculated, and in stead the trend will follow the seasonal adjusted figures. One important exception is the last observation, where the trend will be an extrapolated figure where the last observation is not included. The trend figures from, and including, March 2020 will therefore be difficult to interpret.

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

Response rate for May 2020

The data collection for May has been conducted in the period from 29th of May to 2nd of July 2020. The response rate for May 2020 is 94 per cent, while the corresponding rate for the same period last year was 98 per cent.

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