Norway: Industrial production declines in January
March 6, 2020
Industrial production decreased a seasonally-adjusted 2.3% in February over the previous month, which was down from December’s downwardly revised 1.4% rise (previously reported: +1.5% month-on-month).
January’s fall was driven by a contraction in the extraction and related services sector, which accounts for around 65% of industrial production in Norway, as temporary shutdowns in key oil fields weighed on production. Meanwhile, the manufacturing sector was steady over the previous month in January, and the electricity, gas and steam sector contracted at a softer pace.
In annual working-day adjusted terms, industrial output increased 0.3% in January, which was down from the 1.1% expansion in December. Meanwhile, the annual average change in industrial production was minus 4.6% in January (December 2019: -4.9%).
This year, industrial production will likely increase at a healthy pace as Equinor’s Johan Sverdrup powers the oil and gas sector. The mega-project is projected to provide a major boost to Norway’s energy sector in 2020, and will remain a key driver of industrial production over the next couple of years. Nevertheless, weak oil and gas prices due to elevated production and poor demand prospects, could weigh on output levels.
Author: Steven Burke, Economist