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Fast Comment NorwayManufacturing output declined in January, but the trend is still positive

  1. Manufacturing output down by 2 percent in Jan, following +1.2 percent in Dec
  2. Below market expectations: consensus forecast was -0.4 percent, while we expected -0.7 percent
  3. But the rising trend remains intact, and the outlook is positive
Manufacturing output down by 2 percent in January; below market expectations
Manufacturing output fell more than expected in January, by 2.0 percent m-o-m. The consensus was for a small decline of 0.4 percent, while we had expected -0.7 percent. Still, even if the outcome for January was well below expectations, the trend is still pointing upwards. Recall that output rose by 1.2 percent in December, which marked the fourth consecutive monthly rise. Over the past three months, manufacturing output has increased by 1.6 percent compared with the previous three-month period. An increase in both petroleum-related manufacturing and other industries contributed to growth. Ships, boats and oil platforms contributed the most to the overall increase. This increase is particularly related to growth within the building of ships. The overall manufacturing outlook remains positive, given the backdrop of a weak currency and strong global growth. In addition, petroleum investments will rise quite substantially this year, although from low levels. However, this will, in any case, provide a welcome boost to the oil-supplying manufacturing sector. As we have already learned from Norges Bank’s Regional Network, output expectations among supplying industries have increased substantially (Figure 2). The upshot is that the 2 percent drop in manufacturing output in January should be largely ignored.


Disclaimer

Marius Gonsholt Hov

Senior Economist

Norway

maho60@handelsbanken.no

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