The producer price index (PPI) rose by 8.2 percent from July to August. There were large price increases on natural gas, electricity and services related to extraction. For manufacturing in total, the prices fell by 1.6 percent and slowed the increase in PPI. The price on crude oil also sank in August.
First price decrease for manufacturing since May 2020
The price index for producer prices in the manufacturing industries has increased continuously from June 2020 to July 2022.¹ This trend was broken in August, with prices on manufacturing falling by 1.6 percent.
– After over two years of partly heavy price increases for Norwegian manufacturing, we now see prices decreasing on several important manufacturing industries in August, says Espen Kristiansen, head of division for price statistics at Statistics Norway.
Prices fell for producers of basic metals, chemical products, and seafood. The largest contributor, however, was the manufacturing of coke and refined petroleum products, which fell by about 9 percent. The prices on basic metals went down 5.6 percent and were also a strong contributor to the fall in manufacturing prices. The fall on basic metals was true both for iron and steel as well as for non-ferrous metals. Non-ferrous metals’ prices fell by 5 percent in August, continuing a downwards trend that started in June.
For the food industry, prices fell by a little more than 1 percent, with the largest contributor being the seafood industry, whose prices had a downturn of 4 percent.
Another important manufacturing industry in PPI is the chemical industry. Prices in this category continued falling in August and has fallen by 4.5 percent since June. Most importantly for this decrease has been in the prices on basic chemicals, which fell by about 6 percent in the same period.
Energy goods up 44.9 percent since May 2022
This group is in the Norwegian PPI chiefly made up of crude oil, natural gas, electricity and refined petroleum products in PPI has had price increases of about 13 percent in each month since May.
– Lower supply of natural gas and electricity has given way to heavy pressure on prices in the whole of Europe. This gave increased prices for Norwegian producers of gas and electricity in August, Kristiansen says.
The most important contribution to this has been a huge increase in prices on natural gas. This comes because of the decreased supply of natural gas following the Russian invasion of Ukraine. This lowered supply has increased the demand for Norwegian natural gas, which in turn has driven prices up.
In August, the index for In Norway, production and distribution of electricity make up the principal parts of this group rose by a little more than 47 percent. This also contributed to the increase in prices on energy goods in PPI.
The mean spot price for electricity for August, measured on the Nordic electricity exchange Nord Pool (nordpoolgroup.com), increased by close to 130 percent from July. Prices for manufacturing of coke and refined petroleum products pulled in the other direction, with a fall close to 9 percent. This was accompanied by the fall in the price on crude oil.
¹ Corrected 9 September 2022, 08:50 a.m.