Improvement In Industrial Confidence In Q2

Statistics Norway’s industrial confidence indicator picked up to 3.9 in Q2 (vs a 0.6 point upwardly revised 0.6 prior), the highest since Q1 2022 and above the historical average of 2.9. This is indicative of an increase in activity in the quarter ahead.

• The increase follows a recovery in manufacturing industrial production momentum in 2024. Meanwhile, we suspect that the 4-point fall in the manufacturing PMI to 47.7 in June was more noise than signal.
• Capital and consumer goods manufacturers drive the improvement in industrial confidence, expecting increased production in Q3.
• In Q2, capital goods producers drove activity. The survey notes that “The growth for manufacturers of investment goods in the last two years has been largely driven by the construction of oil platforms and modules industry”.
• Industrial managers generally reported increases in cost pressures, which were partially pass-on through higher prices. However, the survey notes that “there are reports of declining profitability”.
• Capacity utilisation was estimated at 78.5% at the end of Q2, up from 78% in Q1 but still below the historical average of 80%.