Norway Industry September 2016

Norway

Norway: Contraction in industrial production intensifies in September

In September, industrial production fell 5.6% from the previous month in seasonally-adjusted terms, decreasing from the 4.9% fall recorded in August and marking the lowest reading since April 2015. A sharp decline in oil and gas extraction and extraction-related services more than offset a timid rebound in manufacturing.

In annual terms, industrial production contracted 12.4% in September, a severe deterioration from August’s 6.4% fall. Meanwhile, annual average growth in industrial production dropped from minus 0.9% in August to minus 2.1% in September, which marked the worst result since February 2014.

Industrial production in Norway is highly affected by oil and gas extraction; the category accounts for about 72.0% of the index. The persistent low-oil price environment has taken a toll on the oil and gas drilling industry. Norwegian producers see themselves obliged to heavily cut costs, which also entails large-scale layoffs. In late September, difficult discussions over a labor deal had sparked several hundred oil services workers to strike for three weeks, which severely dragged on industrial output.

FocusEconomics Consensus Forecast panelists project that industrial production will contract 2.5% in 2016, which is down 0.2 percentage points over the previous month’s forecast. For 2017, the panel expects that industrial production will drop 0.4%, which is down 0.5 percentage points from last month’s estimate.


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Norway Industry Chart


Norway Industry September 2016

Note: Month-on-month seasonally adjusted and year-on-year variation in %.
Source: Statistics Norway (SSB).


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