Significant drop in manufacturing output

The index level for Norwegian manufacturing in the first quarter of 2020 amounted to 118.1 (2005=100). The corresponding figure for the previous quarter was 119.3. The long term trend shows that manufacturing output leveled out in the second half of 2019. Since March 2020 is specified as an outlier 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: severe fall in petroleum-related manufacturing, growth in food products

According to seasonally-adjusted figures, manufacturing output saw a decline of as much as 3 per cent from February to March 2020. The fall is particularly related to low activity among producers within petroleum-related manufacturing. These are labour-intensive establishments that deliver most of their goods and services to the Norwegian oil and gas sector. Strict infection control rules and quarantine of employees are key factors behind the reduced production level. Building of ship, boats and oil platforms saw the largest output drop with a decline of as much as 22 per cent.

On the other hand, food products contributed to dampen the overall production decline with a clear increase of 4.1 per cent. The growth must be seen in context with high demand from the Norwegian grocery sector due to the Corona-situation. The increased demand is a result of reduced cross border trade as well as hoarding of groceries in the second half of March. For more details, see press release regarding increased grocery shopping in March.

Three-month change: clear decrease from the 4^th quarter of 2019 to the 1^st quarter of 2020

According to seasonally-adjusted figures, manufacturing output saw a clear decline of 1 per cent from the 4^th quarter of 2019 to the 1^st quarter of 2020. The decline on quarterly basis is particularly due to the low production level in March. Ships, boats and oil platforms together with repair and installation of machinery had the largest output fall, and contributed the most to the overall production drop.

Monthly change: Unchanged output in the Euro area in February 2020

Estimated figures from Eurostat, the EU’s statistical office, indicate that manufacturing output in the Euro area was unchanged from January to February 2020. This flat development is however likely to be temporary, as the manufacturing output in the euro area is expected to decline strongly in the coming months due to the effects of the Covid-19 virus.

In the same period, Norwegian manufacturing saw a minor output fall of 0.5 per cent. In Sweden the production level was more or less unchanged, while Denmark experienced a clear output increase of 2.1 per cent.

For more key figures about the European business sector, see Eurostat’s information page about European economic statistics.

Three-month change: oil and gas contributed to an increase in the overall production index

According to seasonally-adjusted figures, the total production index (PII) covering extraction, mining, manufacturing and electricity supply saw an increase of 1.5 per cent in the first quarter of 2020 compared to the fourth quarter of 2019.

Extraction of crude petroleum had a clear growth of 6.9 cent, while extraction of natural increased by 3.9 per cent. The oil and gas production on the Norwegian continental shelf was not significantly affected by the Corona-situation in the first quarter. 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 the first quarter of 2020, see the press release from The Norwegian Petroleum Directorate.

Within support activities for petroleum and natural gas extraction, there was an output increase equivalent to 0.7 per cent in the first quarter of 2020 compared with the previous quarter. In the same period, mining and quarrying saw a decline of 4.7 per cent, while Norwegian electricity supply increased by 4.1 per cent. The production within electricity supply was especially high in March, partly due to opening of new wind farms.