Price fall in electricity and natural gas
The producer price index for oil and gas, manufacturing, mining and electricity (PPI) fell by 2.2 per cent from April to May. The decline in prices of electricity and natural gas was the most important factor behind the fall in the PPI. From May 2012 to May 2013, the PPI fell by 1.7 per cent.
|May 2013 / April 2013||May 2013 / May 2012||May 2013|
|1The weights are updated annually, and are valid for the entire year.|
|Extraction, mining, manufacturing and electricity||-2.2||-1.7||242.2||1 000.0|
|Extraction and related services||-3.1||-3.9||370.1||482.3|
|Mining and quarrying||3.3||11.6||172.6||9.6|
|Food, beverages and tobacco||1.0||3.0||148.0||94.6|
|Refined petroleum, chemicals, pharmaceuticals||-1.6||-6.6||211.4||136.5|
|Machinery and equipment||0.1||2.3||149.1||47.9|
|Electricity, gas and steam||-12.1||17.3||255.0||42.0|
The PPI was 242.2 (2000=100) in May. Since May 2012, the index has been quite stable and has fluctuated at around a mean value of 244.5. Higher prices of oil, natural gas and food products in the period May-December 2012 were offset by falling prices of basic metals and electricity. So far in 2013, the oil prices have fallen beyond the 2012 level, while electricity prices have been much higher than in May-December last year.
One-month change: drop in natural gas and electricity
A sharp drop in prices of natural gas caused a price decline in extraction of oil and natural gas in May, while oil prices were virtually unchanged from April to May. A fall in electricity prices of 12.1 per cent was another important reason for the decline in the overall PPI. In May, electricity prices for Norwegian households were greatly reduced due to lower spot prices in the electricity market. The system price on the Nordic power market Nord Pool fell by 19.3 per cent from April to May. The lower electricity price has resulted in a decline in the PPI in the domestic market, while the drop in gas prices contributed to the decline in the index for the export market.
Within manufacturing, prices fell by 0.4 per cent and were about 2.8 per cent lower compared to April 2012; a historically high price level for manufacturing. A 2.9 per cent price drop in refined petroleum products was the main reason for the fall in prices in manufacturing in May. Another industry that was important for the price development in manufacturing was basic metals, where prices fell by 1.2 per cent from April to May.
Manufacturing groups with higher prices in May were chemical and pharmaceutical products, as well as food, beverages and tobacco. Within the former group, prices increased by 1.7 per cent due to higher prices in chemical products, while the prices of pharmaceutical products were unchanged. Within food, beverages and tobacco, prices increased by 1.0 per cent as a result of price rises in both food and beverages.
Twelve-month change: oil, petroleum products and metals pulled the PPI down
The PPI fell by 1.7 per cent from May 2012 to May 2013. Falls in prices within extraction of oil and natural gas, as well as refined petroleum products were important reasons for the decline in the PPI. Prices in these groups fell by 3.8 and 9.5 per cent respectively due to lower prices of crude oil and oil products. Prices in mining support service activities and basic metals also declined from May 2012 to May 2013, by 4.4 and 7.0 per cent respectively.
Higher prices in food products and electricity helped to moderate the decline in the overall PPI. The rise in these groups was 2.6 and 17.3 per cent respectively. In addition, prices within machinery and equipment increased from May 2012 to May 2013, mainly due to higher prices of general purpose machinery and equipment.