PPI went up
After two months of significant decreases, the Producer Price Index (PPI) rose 0.3 per cent from December to January. Increased prices on fish, electricity and crude oil were the main contributors.
The prices on processed fish rose 6.9 per cent from December to January and this, in addition to a price increase on crude oil, were the main contributor in pulling up the Producer price index. The price increase was sharpest on exported fish, but there was also a significant increase within domestic sales. The main contribution in reducing the increase in the PPI was lower prices within refined petroleum products. Something that is closely related to the decrease in the price of crude oil in November and December.
Decrease in manufacturing
For manufacturing, the prices fell 0.5 per cent from December to January, something that to a large degree can attributed to the decrease within refined petroleum. However, if the refining industry is excluded, prices within manufacturing rose 1.6 per cent in that period. Something that historically is a sharp increase. In addition to processed fish, prices rose within basic chemicals, metals and repair and installation of machinery.
Figure 1. Price indices. 2015=100
|Manufacturing excluding refined petroleum||Manufacturing|
Updated weights for 2019
The PPI is computed as a weighted mean of price changes. For the PPI to best reflect the structure of the Norwegian industry, the weights are updated each year. The new weights take effect from January and represent the production values of the various industries the previous year.
The production values within oil and gas extraction increased by more than NOK 100 billion from 2017 to 2018, partially due to higher prices on oil and gas in 2018. Oil and gas as a share of the total weights thus increase from 32 per cent in 2018 to 37 per cent in 2019. The weight share of extraction related services in 2019 is approximately the same as in 2018, after several years of decreasing production values.
The manufacturing industries' share of the total weights has decreased slightly, from 57 per cent in 2018 to 52 per cent in 2019. The main contributors to the decrease is machinery and equipment industries, repair and installation of machinery, and manufacturing of pharmaceutical products. In manufacturing of food, beverages and tobacco, as well as refined petroleum, the production values increased from 2017 to 2018, but the weight share of the industries still decreased, due to the substantial value increase in oil and gas extraction.
Values within electricity production and distribution increased by more than NOK 15 billion from 2017 to 2018. The weight share of power supply in the PPI thus increased by 0.7 percentage points this year.
Figure 2. Weight shares PPI for 2018 and 2019. Per mille
|Mining and quarrying||Extraction of oil and natural gas||Extraction and related services||Manufacturing||Electricity, gas and steam||Water supply|