PPI continues to rise
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.
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|
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|