Norway: Industrial production records largest drop in six months in November
January 8, 2015
In November, industrial output fell 1.9% over the previous month in seasonally-adjusted terms, which contrasted the revised 0.6% increase tallied in October (previously reported: +1.4% month-on-month). The print marked the largest drop since May 2014. According to Statistics Norway, November’s decline mainly reflected a sharp drop in oil and gas extraction as well as a contraction in manufacturing output. Conversely, growth in the electricity, gas and steam sector rebounded in November.
On an annual basis, industrial production expanded 4.2% in working-day adjusted terms in November. The reading came in under the 10.7% increase tallied in the previous month. Despite the deterioration observed in November, the trend continued to point upward, with annual average growth in industrial production rising from October’s 2.6% to 3.1% in November, which represented a 28-month high.
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.