Norway: Contraction in industrial production intensifies in September
November 7, 2016
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.