Norway: Industrial production swings to contraction in August
October 7, 2016
In August, industrial production decreased 4.7% over the previous month in seasonally-adjusted terms, which contrasted the 4.7% expansion recorded in July and marked the lowest reading since April 2015. Industrial output was dragged down in August by significant declines in oil and gas extraction and extraction-related services and in manufacturing.
In annual terms, industrial production contracted 6.4% in August, which contrasted July’s 0.5% increase. Meanwhile, annual average growth in industrial production dropped from minus 0.1% in July to minus 0.9% in August, which marked the worst result since March 2014.
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 it peaked in 2001. While the government is encouraging operators to increase recovery rates from oil and gas fields, these attempts have been undermined by increases in costs and taxes, which have dragged down overall industry output.