Norway: Industrial production accelerates at the outset of the year
March 7, 2014
In January, industrial output rose 1.1% over the previous month in seasonally-adjusted terms. The expansion followed the 0.5% increase tallied in December and marked the third consecutive expansion in output. According to Statistics Norway, January's expansion mainly reflects a healthy rebound in the electricity, gas and steam category. Conversely, oil and gas extraction, as well as manufacturing output, dipped into the red in January. On an annual basis, industrial production expanded 2.5% in working-day adjusted terms in January. The increase contrasted the 2.2% drop observed in December and marked the highest rate in six months. As a result, the trend improved, with annual average growth in industrial production rising from minus 4.9% in December to minus 3.9% in January. 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 down 0.9 percentage points over the previous month's estimate. In 2015, the panel sees industrial production falling 0.2%.