Norway: Industrial production records second consecutive drop in August
October 7, 2014
In August, industrial output fell 0.6% over the previous month in seasonally-adjusted terms, which followed the 0.5% drop tallied in July. The print marked the second consecutive drop in industrial output. According to Statistics Norway, August’s contraction mainly reflected a decline in oil and gas extraction as some fields on the Norwegian continental shelf experienced a fall in production due to maintenance work and technical difficulties. Conversely, manufacturing output accelerated, while the electricity, gas and steam sector contracted at a slower pace in August.
On an annual basis, industrial production expanded 2.3% in working-day adjusted terms in August, which contrasted the 2.8% decline recorded in the previous month. As a result of the annual increase recorded in August, the trend improved, and annual average growth in industrial production swung from July’s minus 0.3% to plus 0.3%.
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.