Norway: Industrial production in January records largest drop in eight months
March 6, 2015
In January, industrial output fell 3.0% over the previous month in seasonally-adjusted terms, which contrasted the 0.3% increase tallied in December. The print marked the largest drop since May 2014. According to Statistics Norway, January’s contraction mainly reflected declines in oil and gas extraction, manufacturing output as well as in the electricity, gas and steam sector.
On an annual basis, industrial production in January declined 0.4% in working-day adjusted terms. The reading contrasted the 3.5% increase tallied in the previous month. As a result of the deterioration observed in January, the trend continued to point downward, with annual average growth in industrial production falling from December’s 3.6% to 3.3%.
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.