The Producer Price Index (PPI) measures price developments in manufacturing, extraction of oil and gas, electricity supply and mining, both in terms of sales to the Norwegian market and abroad. In this article, we mainly focus on the manufacturing industries. Key Norwegian manufacturing industries include the food industry, chemical production, petroleum and coal processing, and basic metal manufacturing.
The producer price index (PPI) measures the price development that important parts of the Norwegian industry receive for their goods. Compared with the more well-known consumer price index (CPI), PPI measures price developments at an earlier point in the value chain. The CPI measures the price development that households pay for different goods, while the PPI measures prices "at the factory gate". Thus, PPI is an important indicator of the condition in the Norwegian industry. The index is used to analyse the Norwegian economy and can also be an indication of the development in the CPI. The PPI measures the price development in extraction of oil and natural gas, manufacturing, water- and electricity supply and for certain services, including services related to oil and gas extraction. Prices are measured on goods sold in the first stage of sales from the producer to the Norwegian market (domestic market), in addition to the foreign market (export market).
Export-oriented manufactured goods saw the largest price increase
Prices of manufactured goods sold to both the domestic and export market rose by 5.9 per cent from March last year to March this year. This is a somewhat lower twelve-month growth than in February, when it was 6.5 per cent.
– A trend we saw last year continues into 2025: The inflation on exported goods is increasing, while inflation on goods sold in the domestic market is lower and more stable, says Espen Kristiansen, head of section at Statistics Norway.
In the domestic market, prices of manufacturing goods increased by 3.6 per cent over the last twelve-month, with important contributions from food products, chemicals and basic metals.
Manufacturing prices in the export market increased by 10 per cent from March last year to March this year, while the twelve-month rate in February was 11.3 per cent. In the export market, all important manufacturing industries had a price increase in the last twelve months. However, prices on refined petroleum products, were only slightly above last year's prices, with a modest price increase of 0.6 per cent, down from a price increase of 9.6 per cent in the previous twelve-month period.
Figure 2 shows important export-oriented manufacturing industries and the development in the twelve-month rate over the past three months. The chemical industry had a particularly high twelve-month rate from March last year to March this year, but the figure shows that the twelve-month rates can vary somewhat.
Export prices for seafood continue to increase
Higher export prices in the food industry are mainly due to higher prices of seafood. Prices for exported seafood rose sharply over the last six months in 2024 and continued until January this year. Despite a stabilization in fish prices the last two months, prices on exported seafood are still at a high level. From March last year to March this year, prices were around 19 per cent above last year's level.
There are several factors that affect the export prices of seafood. An important factor is the Norwegian krone exchange rate. Norwegian export companies usually receive payment for their goods in euros or dollars. When the krone depreciates against foreign currency, exporters receive more kroner for each euro or dollar, and measured in Norwegian kroner, export prices thus increase. The krone depreciated by just over two per cent against both the euro and the dollar from the first to the second half of last year, which may have contributed to a sharp rise in prices for exported fish in this period.
Higher prices on imported food
Statistics Norway's price index of first-hand domestic sales (PIF) shows price changes for imported goods as well as price changes on goods sold to the domestic market. One important commodity group within the import market is food.
Throughout most of 2023, there were high twelve-month rates on imported food, with a price growth of between 12 and 22 percent. In 2024, the twelve-month rates fell towards 2 percent.
– At the end of 2024 and so far this year, the twelve-month rate on imported food seems to accelerate, with around 11 per cent price increases in both February and March, says Kristiansen.
Other important twelve-month changes affecting the total PPI
- Prices within extraction of crude oil and natural gas fell from February to March, down 14.2 percent, and pulled down the twelve-month rate from 43 percent in February to around 17 percent in March.
- Prices in power supply, which includes electricity and power distribution, increased by around 14 per cent from March last year to March this year, while the twelve-month rate in February was 40.3 per cent.
