The index level for Norwegian manufacturing in the 2nd quarter of 2021 amounted to 119.0 (2005=100). The corresponding figure for the previous quarter was 120.7. Despite the decline in the 2nd quarter, figures for the latest months indicate that the production activity has stabilized more or less on the same level as seen prior to the Covid-19 pandemic (see figure 1).

Figure 1. Production development in manufacturing. Seasonally adjusted and smoothed seasonally adjusted figures¹. 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: fall in petroleum-related manufacturing

According to , manufacturing output fell by 1.4 per cent in the 2nd quarter of 2021 compared to the previous quarter. This decline was particularly related to a decrease of 3.8 per cent in (see figure 2). Building of ships, boats and oil platforms saw a decline of as much as 7.5 per cent compared to the last quarter. This decrease in production was partially related to difficulties with access to labour from abroad due to restrictions on international travel and quarantine requirements. Computer and electrical equipment also saw a decline in manufacturing output in this period.

Strong growth within basic chemicals on the other hand reduced the total decline in manufacturing. This increase was partially due to better market conditions for businesses within the sector.

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 in manufacturing output in June

According to seasonally-adjusted figures, manufacturing output saw an increase of 0.7 per cent from May to June 2021. Building of ships, boats and oil platforms along with the industry group computer and electrical equipment contributed significantly to total manufacturing growth with an increase of 6.4 and 4 per cent respectively. Other industries such as food products and non-ferrous metals also registered solid growth, with the latter increasing production by as much as 12.5 per cent from last month.

On the other hand, the industry group rubber, plastic and mineral products along with basic chemicals experienced a noticeable decline and softened total manufacturing growth for the month.

Monthly change: output in the Euro area declined in May 2021

Estimated figures from Eurostat, the EU’s statistical office, indicate that manufacturing output in the decreased by 0.8 per cent from April to May 2021.

In the same period, Norwegian manufacturing production had a marginal decline of 0.1 per cent. Sweden had unchanged output, while Denmark saw an increase of 2.6 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: marginal growth in the total production index

According to seasonally-adjusted figures, the total production index (PII) covering extraction, mining, manufacturing and electricity supply had a marginal output increase of 0.2 per cent in the 2nd quarter compared with the previous quarter. Extraction of crude petroleum saw an increase of 1.7 per cent, while extraction of natural gas fell with 3.3 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 decrease of 1.7 per cent in the 2nd quarter. In the same period, mining and quarrying saw an increase of as much as 7.3 per cent, while production within Norwegian electricity supply went up by 3 per cent.

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.