Sharp decline in manufacturing investments for 2020

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The companies’ latest investment estimates for 2020 are expected to decrease within oil and gas, manufacturing, mining and quarrying and electricity supply. Lower investment in manufacturing is the main reason for the overall decline. Updated investment estimates for 2021 indicate a further decline in total investments.

Written by: Edvard Andreassen

The investment survey conducted in August within oil and gas, manufacturing, mining and quarrying and electricity supply in 2020 amounted to NOK 252 billion. This is 2.0 per cent lower than the corresponding figure for 2019. Significantly lower investments in manufacturing are the main reason for the overall decline. The decline is offset by an increase in investments in oil and gas activities. For more details about investments within the oil and gas industry, please see the following article.

The companies’ latest total investment estimates for 2021 indicate a sharp decline of 13 per cent compared with the corresponding figures of 2020.The decrease in 2021 is driven by a sharp fall in investment within the oil and gas industry. If no more new large projects within manufacturing and electricity supply are decided also these industries will contribute negatively to the overall investments in 2021.

Figure 1. Estimated investments collected in 3rd quarter same year

Extraction and pipeline transport Manufacturing, mining and quarrying Electricity supply, gas and steam
2010 145644 20540 15058
2011 157766 20907 19015
2012 190681 21244 20898
2013 221795 21202 20902
2014 237056 21646 22181
2015 203736 21254 24137
2016 168739 22988 27213
2017 155627 22310 34034
2018 156313 25997 41737
2019 181729 35111 39961
2020 184562 27392 39792

According to seasonally-adjusted figures, quarterly final investments had following development from the 1st quarter of 2020 to the 2nd quarter of 2020:

  • Oil and gas: -8.5 %
  • Manufacturing : -13.6 %
  • Electricity supply: 18.1 %

Figure 2. Final investments per quarter. Seasonally adjusted. 2005=100

Manufacturing Electricity supply, gas and steam Extraction and pipeline transport
Q2-2010 100.6 164.7 148.4
Q3-2010 89.8 187.1 133.2
Q4-2010 99.4 178.1 144.7
Q1-2011 98.3 197.5 156.3
Q2-2011 99.2 204.1 161.1
Q3-2011 107.9 188.4 176.9
Q4-2011 104.5 214.5 183.4
Q1-2012 111 218.5 188.5
Q2-2012 109.3 206.8 195.9
Q3-2012 98.4 235 194.1
Q4-2012 106.1 245.3 214.9
Q1-2013 100.6 223.2 224.4
Q2-2013 110.7 234.7 235.9
Q3-2013 108 245 253.3
Q4-2013 103.5 253 253.1
Q1-2014 111.7 258.7 255.4
Q2-2014 112.3 275.8 253.3
Q3-2014 112.1 246.2 249.1
Q4-2014 117.8 248.5 237.1
Q1-2015 100.2 263.3 242.8
Q2-2015 103.9 269.4 230
Q3-2015 116.9 265.5 216.6
Q4-2015 108.4 288.6 203.5
Q1-2016 127.5 309.3 192
Q2-2016 123.8 287.1 186.9
Q3-2016 124.4 313.2 179.1
Q4-2016 129 323.5 171
Q1-2017 121.1 369.7 171
Q2-2017 110.3 313.4 170.4
Q3-2017 110.7 415.1 152.5
Q4-2017 123.1 376.1 165.3
Q1-2018 121.3 424.1 154.3
Q2-2018 133.7 473.4 161.8
Q3-2018 134 489.2 170.7
Q4-2018 137.7 479.5 183.2
Q1-2019 158.4 431.6 183.6
Q2-2019 164.1 444.8 192.7
Q3-2019 185.3 474.6 199.7
Q4-2019 170.9 475.8 208.8
Q1-2020 160.1 433.6 213.3
Q2-2020 138.3 512 195.2

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

Thursday the 12th of March 2020 the Norwegian government introduced actions against the spreading of the Corona-virus in Norway. Hence, the seasonal adjustment routine during the Corona- crisis is done in such a way that the figures during the crisis (from the 1st quarter), are not included in the basis for the calculation of the seasonal pattern. Technically, in the seasonal adjustment routine this is done by specifying the 1st quarter and following quarters as outliers.

This implies that normal trend figures will not be calculated, and instead 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, the 1st quarter will therefore be difficult to interpret.

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

Response rate for the 3rd quarter

Due to the Corona-situation and lay- offs the response rate for the 3rd quarter is lower than usual. The response rate for the parts of the survey covering manufacturing, mining & quarrying and electricity supply is 90 per cent. The corresponding figure for the same quarter last year was 97 per cent. Hence, this leads to somewhat more uncertainty in the figures.

The oil and gas industry has a separate data collection, and the response rate for this part of the survey is 97 per cent. The response rate for the corresponding quarter last year was 96 per cent.

 

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