Norway: Industrial production records fourth consecutive expansion in February
April 7, 2014
In February, industrial output rose 0.7% over the previous month in seasonally-adjusted terms. The expansion followed the 1.1% increase tallied in January and marked the fourth consecutive expansion in output. According to Statistics Norway, February's expansion mainly reflects a rebound in oil and gas extraction, as well as in manufacturing output. Conversely, the electricity, gas and steam category dipped into the red in February.
On an annual basis, industrial production expanded 5.2% in working-day adjusted terms in February. The increase followed the 2.5% increase observed in January 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 3.9% in January to minus 2.6% in February.
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.
Within this setting, FocusEconomics Consensus Forecast panelists expect industrial production to expand 0.3% in 2014, which is unchanged over the previous month's estimate. In 2015, the panel sees industrial production falling 0.2%.