The index level for Norwegian manufacturing in the first quarter of 2021 amounted to 120.7 (2005=100). The corresponding figure for the previous quarter was 117.3. After a sharp decline from March to May 2020, manufacturing production has seen a steady growth in the last three quarters. The output level in March 2021 is now higher than the levels seen prior to the Corona epidemic, and is also the highest level registered since April 2015.

Figure 1. Production development in manufacturing. Seasonally adjusted and smoothed seasonally adjusted figures.¹ 2005=100

¹ March 2020 and the subsequent months are specified as outliers in the seasonal adjustment routine Hence, the trend figures for 2020 are not included in the figure.

Three-month change: extraordinary high activity within processing and slaughter of fish

According to , manufacturing output saw a strong output increase of 2.9 per cent in the first quarter of 2021 compared with the previous quarter. This is the third consecutive quarter with clear output growth in manufacturing. There was an increase in both and in other manufacturing branches. However, it was the latter that contributed the most to the overall output increase (see figure 2).

Food products was the industry that contributed the most to the overall growth with an increase of more than 5 per cent. The activity level was particularly high within processing and preserving of fish due to high slaughter volume of salmon and pelagic fish. Refined petroleum, chemicals and pharmaceuticals experienced also a clear production growth in the first quarter. The output increase in the industry grouping was among others due to high production of pharmaceutical products.

Figure 2. Indicator for petroleum-related industries. Seasonally adjusted. Three-month moving average¹. 2005=100

¹ The index value for period m is the average of period m, m-1 and m-2

Monthly change: increase from February to March

According to seasonally-adjusted figures, manufacturing output had an increase of 0.7 per cent from February to March 2021. The industry grouping rubber, plastic and mineral production contributed the most to the overall output growth with an increase of 8 per cent. In addition, food products together with refined petroleum, chemicals and pharmaceuticals also had a production increase in this period.

On the other hand, the overall output increase was dampened by a decline in building of ships, boats and oil platforms. This is partly due to quarantine for foreign workers in March.

Monthly change: decrease in the Euro area in February 2021

Estimated figures from Eurostat, the EU’s statistical office, indicate that manufacturing output in the had a decrease of 1 per cent from January to February 2021.

In the same period, Norwegian manufacturing production had a minor decline 0.4 per cent. Sweden saw an increase of 0.9 cent, while Denmark had a decrease of 1 per cent.

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

Figure 3. Index of production for manufacturing. Euro area and Norway (2015=100). Seasonally adjusted

Three-month change: clear increase in total production index

According to seasonally-adjusted figures, the total production index (PII) covering extraction, mining, manufacturing and electricity supply had a clear output increase of 3.1 per cent in the first quarter of 2021 compared with the previous quarter. Extraction of crude petroleum saw an increase of 3 per cent, while extraction of natural gas went up with 0.9 per cent. For more details about oil and gas extraction in this period, see the press release from The Norwegian Petroleum Directorate.

Within support activities for petroleum and natural gas extraction, there was an output growth of 2.6 per cent in the first quarter of 2021 compared with the previous quarter. In the same period mining and quarrying saw a severe drop of as much as 28.5 per cent, while production within Norwegian electricity supply increased with 2.6 per cent. The severe drop in mining and quarrying must be seen in context with a relative cold winter this year.

Figure 4. Production development. Seasonally adjusted. Three-month moving average¹. 2005=100

¹ The index value for period m is the average of period m, m-1 and m-2.

Thursday 12th of March 2020 the Norwegian government introduced actions against the spreading of the Corona-virus in Norway. Several manufacturing establishment have been affected by these measures, and this has led to a change in the activity pattern compared to what we usually observe. Hence, the seasonal adjustment routine during the Corona- crisis is done in such a way that the figures during the crisis (from March), are not included in the basis for the calculation of the seasonal pattern. Technically, in the seasonal adjustment routine this is done by specifying March and following months 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, March 2020 will therefore be difficult to interpret.

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

It is important to be aware that the uncertainty for the calendar-adjusted and seasonally-adjusted indices for March and April is greater than normal due to the changed placing of Easter. This effect will also affect the seasonally-adjusted figures for the 1st and 2nd quarters. This is accounted for when adjusting for seasonal variations. However, it can still be difficult to adjust for all impacts.