Norway: Industrial production expands for second consecutive month in October
December 5, 2014
In October, industrial output expanded 1.4% over the previous month in seasonally-adjusted terms, which followed the revised 3.7% increase tallied in September (previously reported: +4.4% month-on-month). The print marked the second consecutive monthly increase in output. According to Statistics Norway, October’s expansion mainly reflected a strong rebound in manufacturing output. Conversely, growth in oil and gas extraction slowed in October and the electricity, gas and steam sector dipped into the red.
On an annual basis, industrial production expanded 10.7% in working-day adjusted terms in October. The reading followed the 7.7% increase tallied in the previous month and represented the highest result since May 2012. As a result of the strong annual increase recorded in October, the trend continued to point upward, with annual average growth in industrial production rising from September’s 1.0% to 2.6% in October.
Industrial production in Norway is highly affected by oil and gas extraction; the category accounts for about 72.0% of the index. According to the Ministry of Petroleum and Energy, oil and gas production has been declining ever since reaching a peak in 2001. While the government is encouraging operators to increase the recovery rates from oil and gas fields, the attempts have been undermined by increases in costs and taxes, which have dragged down overall industry output.