Norway: Industrial production records fastest growth in eight months in March
May 8, 2014
In March, industrial output rose 2.3% over the previous month in seasonally-adjusted terms. The expansion followed the revised 0.8% increase tallied in February (previously reported: +0.7% month-on-month) and marked the fastest acceleration since July 2013. According to Statistics Norway, March's expansion mainly reflected faster growth in oil and gas extraction, as well as in manufacturing output. In addition, the electricity, gas and steam category rebounded strongly in March. On an annual basis, industrial production expanded 7.1% in working-day adjusted terms in March. The increase followed the 5.2% increase observed in February and marked the highest rate since June 2012. As a result, the trend continued to improve, with annual average growth in industrial production rising from minus 2.6% in February to minus 1.3% in March. Norway's industrial production outcome is highly affected by oil and gas extraction; the category accounts for 71.9% of the index. According to the Ministry of Petroleum and Energy, oil and gas production reached a peak in 2001 and has been declining ever since. Although the government encourages operators to increase recovery rates from the oil and gas fields, the attempts have been undermined by increases in costs and taxes, which have thus dragged down overall industry output. FocusEconomics Consensus Forecast panelists expect industrial production to expand 0.5% in 2014, which is up 0.2 percentage points over the previous month's estimate. In 2015, the panel sees industrial production falling 0.5%.