Norway: Industrial production takes a breather in February; trade unions and employers reach a tentative agreement on compensation levels in April
April 9, 2018
According to Statistics Norway, industrial production fell a seasonally-adjusted 0.3% from the previous month in February, contrasting the revised expansion of 3.3% in January (previously reported: +3.4% month-on-month).
February’s decrease was largely driven by lower output in the extraction and related services sector—the largest industrial sector in Norway. Moreover, mining and quarrying contracted sharply in February. Conversely, production in the electricity, gas and steam sector increased at a solid pace, while the manufacturing sector also saw a slight expansion.
In year-on-year terms, industrial production increased 1.8% in February, matching the expansion recorded in January. Annual average growth in industrial production ticked up a notch to 2.4% in February, from 2.3% in January.
In other recent developments, on 8 April, trade unions from across the private sector reached a collective, tentative agreement with employers over compensation levels. The agreement, which would pave the way for an average pay rise of 2.8% this year and some small pension reforms, still needs the final consent of trade union members. Nevertheless, the tentative accord should stave off a large-scale strike that was previously planned by workers, boding well for industrial production in the coming months.
Norway Industrial Production Forecast
FocusEconomics Consensus Forecast panelists project that industrial production will grow 2.1% in 2018, which is up 0.1 percentage points from last month’s projection, and 2.0% in 2019.
Author: Edward Gardner, Economist