Marginal decline in manufacturing output in December

–It was especially the labor-intensive industries where there is extensive use of hired labor from abroad that contributed to the strong decline in activity during the first months with strict infection control measures, says advisor in Statistics Norway, Marte Claussen.

–On the other hand, we see that these industries have experienced strong growth in the second half of the year, although their activity level is still below that of the beginning of 2020.

The index level for Norwegian manufacturing in the fourth quarter of 2020 amounted to 117.3 (2005=100). The corresponding figure for the previous quarter was 114.7. Figure 1 shows that since the sharp decline of manufacturing output from March due to the Corona pandemic, output has increased in the second half of the year. The activity level is however still lower than the level in the beginning of 2020.

Monthly change: small decline in overall manufacturing output, but increase in food products

According to seasonally-adjusted figures, manufacturing output had a small decline of 0.2 per cent from November to December. The industry repair and installation of machinery, as well as the industry fabricated metal products contributed most to the decline. The two industries saw a decline of 5.3 and 4.6 per cent respectively.

On the other hand, food products had a strong growth in December, with an increase of 3.5 per cent. It was processing and preservation of fish and meat that contributed most to this increase.

Three-month change: increase in almost every industry in the fourth quarter

According to seasonally-adjusted figures, manufacturing output saw an increase of 2.3 per cent in the fourth quarter of 2020 compared with the previous quarter. Many industries experienced growth in this period. Computer and electrical equipment, together with ships, boats and oil platforms contributed most to the increase, with growth of 10.6 and 11.5 per cent respectively.

Figure 2 shows the output development of the analytical grouping petroleum-related manufacturing on a three-month basis. The indicator had a strong growth of 3.4 per cent in the fourth quarter compared with the third quarter.

Yearly change: manufacturing output fell by 3 per cent in the Corona year 2020

Overall, Norwegian manufacturing output saw a yearly decrease of 3 per cent in 2020 compared with 2019, according to calendar adjusted figures. Manufacturing output fell strongly in March, April and May due to the Corona pandemic. Infection control measures and reduced access to foreign labour were among the factors that contributed the most to the decline in this period. Reduced demand on the global market also contributed to reduced output.

Throughout the second half of the year however, manufacturing output increased significantly, although the output level was still lower than it was in 2019 among several industries. Ships, boats and oil platforms, fabricated metal products, machinery and equipment as well as repair and installation of machinery were among the industries with a strong decline in 2020 compared to 2019.

On the other side, food products saw a strong output growth in 2020 and contributed most to dampen the decline through the year.

–The growth in this industry can partly be ascribed to increased demand from the grocery stores due to reduced cross border trade and a change in consumption patterns due to the consumers staying more at home, Marte Claussen explains.

Monthly change: Solid increase in the Euro area in November 2020

Estimated figures from Eurostat, the EU’s statistical office, indicate that manufacturing output in the Euro area had a growth of 3.3 per cent from October to November 2020. Thus, the output level had almost reached the level it had before the strong decline from March due to the Corona pandemic.

In the same period, manufacturing output in Norway increased with 1.5 per cent. Denmark and Sweden also had an output growth in November, of 5.9 and 1.2 per cent respectively.

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

Three-month change: Decrease in total production index

According to seasonally-adjusted figures, the total production index (PII) covering extraction, mining, manufacturing and electricity supply had an output decrease of 1.8 per cent in the fourth quarter of 2020, compared with the third quarter. Extraction of crude petroleum had a decline of 3.9 per cent, and extraction of natural gas decreased by 7.6 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 solid output growth of 5.8 per cent in the fourth quarter. In the same period, mining and quarrying saw an increase of 11 per cent. Norwegian electricity supply decreased by 1 per cent.