Norway: Industrial production falls in July
September 5, 2014
In July, industrial output fell 0.6% over the previous month in seasonally-adjusted terms, which contrasted the revised 6.0% expansion tallied in June (previously reported: +5.7% year-on-year). According to Statistics Norway, July’s drop mainly reflected a decline in oil and gas extraction as well as in manufacturing output. Moreover, the electricity, gas and steam sector contracted at the fastest pace since April 2013.
On an annual basis, industrial production contracted 2.8% in working-day adjusted terms in July, which contrasted the 3.2% rise recorded in the previous month. As a result of the decline recorded in July, the trend deteriorated, and annual average growth in industrial production swung from plus 0.2% in June to minus 0.3%.
Industrial production in Norway is highly affected by oil and gas extraction; the category accounts for around 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.