Marginal increase in manufacturing output in June

The index level for Norwegian manufacturing in the second quarter of 2020 amounted to 111.5 (2005=100). The corresponding figure for the previous quarter was 118.1. Figure 1 shows that the development in seasonally-adjusted figures has been relatively stable the last year, before the output dropped significantly from March 2020.

Since March 2020 and the subsequent months 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 the latest months 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: sectorial differences in manufacturing output in June

According to seasonally-adjusted figures, manufacturing output saw a minor increase of 0.4 per cent from May to June 2020. This increase comes after three months with severe output decline. The industry grouping refined petroleum, chemicals and pharmaceuticals contributed the most to the overall production increase, followed by the industry grouping furniture and manufacturing n.e.c. These two industry groupings registered an increase of 4.5 and 19 per cent respectively.

On the other hand, food and beverages as well as basic metals had the largest negative contributions in this period. The decline in food and beverages can partly be explained by lower production of fish. The decline within basic metals is related to a poor market situation caused by actions taken in order to stop the spreading of the Corona-virus.

Three-month change: historical fall in manufacturing production

According to seasonally-adjusted figures, manufacturing output saw a clear fall of as much as 5.6 per cent from the 1st to the 2nd quarter of 2020. This is the largest quarterly output decline ever registered for this time series which goes back to 1990. The steep fall is due to the fact that all three months during this quarter have seen low production levels as a result of the Corona-situation. Ships, boats and oil platforms contributed the most to this decline with a substantial drop of as much as 26 per cent.

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

Monthly change: solid output growth in the Euro area in May 2020

Estimated figures from Eurostat, the EU’s statistical office, indicate that manufacturing output in the Euro area had a solid growth of as much as 13 per cent from April to May 2020. This strong output growth comes after two months with severe production decline caused by the actions taken to mitigate the spreading of the Covid-19 virus. After the Member States eased on some of the measures, the manufacturing production increased. However, the output is still low compared with the same period last year.

In the same period, Norwegian manufacturing production went down with 3 per cent. In Sweden manufacturing output increased by 1.1 per cent, while Denmark had a decline of 3 per cent.

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

Three-month change: minor decrease in the total production index

According to seasonally-adjusted figures, the total production index (PII) covering extraction, mining, manufacturing and electricity supply saw a minor decrease of 0.5 per cent in the second quarter of 2020 compared to the first quarter. Extraction of crude petroleum had a growth of 6.8 cent, while extraction of natural gas decreased with 4.7 per cent. For more details about oil and gas extraction in this quarter, 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 as much as 15 per cent in the second quarter of 2020 compared to the first. Strict infection control rules combined with the low oil price and reduced exploration investments on the Norwegian continental shelf explains the low activity level.

In the same period, mining and quarrying saw a decline of 0.9 per cent, while Norwegian electricity supply increased by more than 15 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.

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