Decline in manufacturing output in April

The index level for Norwegian manufacturing in the period February-April 2020 amounted to 116.1 (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.

Since March and April 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.

Monthly change: large differences within the manufacturing sector in April

According to seasonally-adjusted figures, manufacturing output saw a decline of 1.6 per cent from March to April 2020. This decline follows after a decline of 3 per cent from February to March. The decline was particularly related to low activity within labour intensive sectors, including petroleum-related manufacturing. Strict infection control rules and quarantine of employees were key factors behind the reduced production level. Building of ship, boats and oil platforms as well as the industry grouping furniture and manufacturing n.e.c. saw the largest output decrease with decline of 15 and 29 per cent respectively.

On the other hand, basic chemicals and the industry grouping computer and electrical equipment contributed to dampen the overall production decline in April with an increase of 9.4 and 6.1 per cent respectively.

Three-month change: clear decline in manufacturing output

According to seasonally-adjusted figures, manufacturing output saw a clear decline of 2.7 per cent in the period February-April 2020, compared with the previous three-month period. This decline is particularly related to a low production level in March and April. Ships, boats and oil platforms contributed the most to this decline, while food products pulled the overall development in the opposite direction, with a solid production increase in this period.

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

Estimated figures from Eurostat, the EU’s statistical office, indicate that manufacturing output in the Euro area fell by as much as 12 per cent from February to March 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 cars, saw the strongest output decline, followed by investment goods. The country with the strongest decrease in manufacturing output was Italy, with a decline of over 30 per cent.

In the same period, Norwegian manufacturing saw an output decline of 3 per cent. Sweden saw a marginal decline of 0.2 per cent, and Denmark experienced a decline of 0.4 per cent.

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

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 2 per cent in the period February-April 2020 compared with the previous three-month period.

Extraction of crude petroleum had a clear growth of 8.4 cent, while extraction of natural gas increased by 1.2 per cent. 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 an output decline equivalent to 4.7 per cent in the period. The decrease was related to strict infection control rules, as well as the low oil price. Mining and quarrying saw an increase of 4.9 per cent, while Norwegian electricity supply increased by as much as 18 per cent. The production within electricity supply was especially high in March and April, which can partly be explained by increased production of hydro power to make room in the reservoirs for melting snow in the coming months.