PPI continues to rise

Published:

The Producer Price Index (PPI) increased by 1.1 per cent from June to July. This was the fifth month in a row with an increase. Except from February this year the PPI has risen continuously since July 2017.

Written by: Espen Hauan

The increase in the Producer Price Index (PPI) from June to July was mainly caused by an increase in electricity prices of 11 per cent. Dry weather and less water than usual in Norwegian water reservoirs partly explain the relatively high electricity prices. This was explained in more detail in the last PPI publication. Prices within oil and gas extraction rose by 1.1 per cent in that same period and contributed somewhat to the overall rise in the PPI. The price of crude oil fell slightly, so it was natural gas prices that pulled the index up. If energy goods are excluded, the PPI rose by 0.1 per cent from June to July.

The twelve-month change shows how much the indices have changed from the same month the previous year. For the total PPI this was 22.6 per cent in July. The large increase was mainly caused by the prices of oil and natural gas, which were both more than 50 per cent higher in July 2018 than in July 2017. This can be illustrated with the price of Brent Blend, which was around 50 USD per barrel in July last year compared to around 75 USD per barrel in July this year. In addition, the twelve-month change in July was relatively high in other important industries:

  • Electricity: 67.6 per cent.
  • Refined petroleum products: 53.9 per cent.
  • Basic metals: 13.5 per cent.

Figure 1. Price indices. 2013=100

PPI total Oil and natural gas extraction Electricity
Jan.13 98.3 97.9 101.9
Feb.13 98.8 98.8 100.3
Mar.13 99.7 98.9 108.2
Apr.13 100 100 110.9
May13 97.8 96.4 97.6
June13 97.6 96.8 92.9
July13 100 100.5 93.7
Aug.13 101 101.7 94.9
Sep.13 101.5 102.1 100.1
Oct.13 100.9 100.2 102.5
Nov.13 101.4 101.5 100.9
Dec.13 103 105.1 96.2
Jan.14 103.5 105.2 96.2
Feb.14 102.8 104 90.5
Mar.14 99.8 98.1 83.5
Apr.14 99.3 97.2 79
May14 98.4 95.1 77.4
June14 98.8 96 75.4
July14 98.3 92.3 83.3
Aug.14 97.6 89.6 88.2
Sep.14 97.6 89.8 93.7
Oct.14 97.4 90.1 87.3
Nov.14 94.7 83.6 87.9
Dec.14 94.9 84.2 95.2
Jan.15 90.6 76 92.1
Feb.15 92.6 80.1 88.4
Mar.15 93.8 82.6 81.8
Apr.15 93.8 82.5 80.5
May15 93.7 83.3 74.9
June15 94 85 62.3
July15 91.8 80.7 53.5
Aug.15 87.9 72.2 60
Sep.15 87.7 72.3 67.2
Oct.15 88.2 72 78.5
Nov.15 88.6 71.4 86.2
Dec.15 84.7 64.2 77.3
Jan.16 80.9 54.4 105.7
Feb.16 78.8 52.8 82.9
Mar.16 79.7 54.3 87.2
Apr.16 80.4 54.9 87
May16 82.6 58.3 88.2
June16 84.9 61.8 95.5
July16 85.2 62 93.5
Aug.16 83.7 60.1 91.8
Sep.16 82.4 58 92.2
Oct.16 84.3 60.5 109.4
Nov.16 86.4 63 125.5
Dec.16 90.8 73.9 110
Jan.17 91.1 72.7 106
Feb.17 93.6 76.3 107.7
Mar.17 92.6 75.4 105.6
Apr.17 90.7 69.7 103.6
May17 89.9 68 103.7
June17 87.6 64.4 95.1
July17 86.7 62.1 98
Aug.17 87.1 62.6 100.2
Sep.17 89.6 66.9 109.9
Oct.17 91.8 73.1 103.7
Nov.17 94.8 78 115.5
Dec.17 97.5 83.7 116.2
Jan.18 100.5 89.2 119.1
Feb.18 98 80.7 133.4
Mar.18 98.5 82.2 143.2
Apr.18 101.7 91.6 134
May18 102.9 93 123.9
June18 105.2 94.2 147.9
July18 106.3 95.2 164.3

Higher prices within wood and wood products

For the manufacturing industry as a whole, the prices fell by 0.1 per cent from June to July. Basic metals were the main contributor in pulling down the overall price development within manufacturing. Food and food products pulled in the other direction with an increase of 0.5 per cent. Within food products, it was mainly processed fish that drove the price increase, while animal feed and dairy product prices fell.

Another industry that contributed to pulling up the price development within manufacturing was wood and wood products. The products within the industry range from such tings as sawn and planed wood to more processed products like wooden prefabricated buildings. The prices within wood and wood products rose by 1 per cent from June to July and have risen 5.3 per cent since July last year.

Figure 2. Price indices. 2014=100

Wood and wood products Manufacturing Manufacturing excluding refined petroleum and basic metals
Jan.14 98.5 99.9 99.6
Feb.14 98.6 99.9 99.4
March14 99.4 99.4 99.3
Apr.14 100.3 99.5 99.4
May14 100.9 99.5 99.4
June14 100.9 100.1 99.3
July14 99.6 100.7 99.5
Aug.14 99.8 101.2 100.2
Sep.14 100.2 100.6 100.6
Oct.14 100.6 100.3 100.5
Nov.14 100.5 100 101
Dec.14 100.8 99 101.8
Jan.15 100.9 97.5 102.7
Feb.15 100.7 98.4 103.3
March15 100.7 99.1 102.4
Apr.15 101.1 99.4 102.4
May15 101.8 99.5 102.6
June15 101.7 99.7 102.7
July15 102 99.8 103.3
Aug.15 102 98.6 103.7
Sep.15 102 97.4 103.6
Oct.15 101.5 97.8 103.6
Nov.15 101.6 98.4 104.8
Dec.15 101.7 97.4 104.9
Jan.16 101.4 96.1 105.3
Feb.16 101.4 95.4 105.6
March16 101.5 95.7 105.6
Apr.16 102.1 96.4 105.6
May16 102.9 97.8 105.8
June16 103.1 99 105.9
July16 103.2 100.3 106.5
Aug.16 103 99.1 106.1
Sep.16 103.5 98.6 105.6
Oct.16 103.2 99.1 105.7
Nov.16 102.9 99.9 105.8
Dec.16 103.4 100.6 106
Jan.17 103.6 102.6 106.3
Feb.17 103.3 104.6 107
March17 103.3 104 107.4
Apr.17 103.8 104.3 107.7
May17 104.3 104.2 108.4
Juny17 104.4 103.5 108.5
July17 104.7 103 108.4
Aug.17 104.5 102.9 107.7
Sep.17 104.5 104.2 107.6
Okct.17 105 104.7 107.3
Nov.17 105.5 105.9 107.9
Dec.17 105.4 107.6 108
Jan.18 104.9 108.5 109.1
Feb.18 105.4 108.5 109.4
March18 106.5 108.3 109.9
Apr.18 108.4 108.8 110.2
May18 109 111.2 111.1
June18 109 112.4 110.6
July18 110.1 112.2 110.7

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