Norway: Industrial production rebounds strongly in September on oil and gas extraction
November 7, 2014
In September, industrial output expanded 4.4% over the previous month in seasonally-adjusted terms, which contrasted the revised 0.5% drop tallied in August (previously reported: -0.6% month-on-month). The print marked a rebound in industrial output following two consecutive monthly drops. According to Statistics Norway, September’s expansion mainly reflected strong rebounds in oil and gas extraction as well as in the electricity, gas and steam sector. Conversely, manufacturing output posted its largest drop in over three years.
On an annual basis, industrial production expanded 7.7% in working-day adjusted terms in September. The reading followed the 2.3% increase tallied in the previous month and represented the highest result since May 2012. As a result of the strong annual increase recorded in September, the trend improved, and annual average growth in industrial production rose from August’s 0.3% to 1.0% in September.
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.