Norway: Industrial production rebounds strongly in June
August 7, 2014
In June, industrial output expanded 5.7% over the previous month in seasonally-adjusted terms, which marked the largest increase since June 2011. The rise contrasted the 5.9% drop tallied in May, which was highly affected by planned maintenance work in several fields on the continental shelf. According to Statistics Norway, June’s expansion mainly reflected a sharp rebound in oil and gas extraction and, to a lesser extent, in manufacturing output. Conversely, the electricity, gas and steam sector dipped into the red in June. According to the Norwegian Petroleum Directorate, planned maintenance work continued in some fields in June.
On an annual basis, industrial production expanded 3.2% in working-day adjusted terms in June, which contrasted the 4.0% decline recorded in the previous month. As a result of the strong figures recorded in June, the trend continued to improve, and annual average growth in industrial production swung from minus 0.5% in May to plus 0.2%—the highest level since February 2013.
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.