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Fast Comment NorwayManufacturing output weaker than expected (again)

  1. Unchanged manufacturing output in June; weaker than expected
  2. Positive growth in Q2, but did not make up for the decline in Q1
  3. Negative overhang to Q3
Unchanged manufacturing output in June; weaker than expected
Manufacturing output was unchanged (m-o-m) in June, following -0.6 percent in May. The outcome was yet again below expectations; consensus expected 0.3 percent, whereas we had anticipated 1.0 percent. The outcome for Q2 as a whole was positive, however, but that was due to the rise in April. Moreover, the 0.8 percent gain (q-o-q) in the second quarter, did not make up for the 1 percent decline by the first quarter of the year. In addition, the weak performance throughout Q2 gives a negative overhang to Q3, at -0.2 percent. We should also note from the press release that the manufacturing sector has gained from the hot summer weather; i.e, ‘underlying’ performance may have been weaker than reported by the actual production data. The upshot is that the performance so far this year has been weaker than one might suspect, given the still weak NOK, a rebound across the oil supplying industries, as well as strengthening signals from the quarterly business tendency survey (Statistics Norway). The only recent weakness reported was the July PMI, which dropped sharply into a slightly negative territory (see the chart below). However, this indicator is not very reliable, and especially during the summer months (owing to a low response rate). Still, the key message is that the manufacturing sector as a whole has not posted the gains we expected to see this year. In addition, trade tensions have intensified, which may have a dampening effect on future growth. We should in particular watch out for weak data coming from the manufacturing sector in the eurozone; such as yesterday’s significant decline in German manufacturing orders, as well as today’s decline in industrial production.


Marius Gonsholt Hov

Senior Economist


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