The prices Norwegian producers received for their goods increased 3.3 per cent from October to November , according to figures from The Producer Price Index (PPI). The PPI measures price developments within extraction, mining, manufacturing and electricity supply, both in terms of sales to the Norwegian market and abroad. In this article, we mainly look at price changes within 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).
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).
Declining price growth for manufacturing goods sold in the domestic market
The prices of manufacturing goods produced and sold in Norway have increased by around 2 per cent from November last year to November this year. In both October and November, the twelve-month growth rate was below 3 per cent, marking the lowest price growth since 2021.
– In the domestic market, producer prices within the manufacturing industry overall continue to rise, but to a lesser extent than in recent years, says Espen Krisitansen head of section at Statistics Norway.
The price growth for manufacturing goods produced in Norway and exported abroad, on the other hand, is increasing. As shown in Figure 1, the export market for manufacturing goods has experienced more uneven price growth in recent years compared to the domestic market. The increased price growth in November is partly due to rising prices within manufacturing of basic chemicals, where export prices for basic chemical products have surged by 22 per cent over the past twelve months, measured in Norwegian kroner.
– The prices of basic chemical products have begun to rise again over the past year, following a decline in 2023. There have been significant month-to-month fluctuations, but over the past four months, export prices have shown consistent growth, says Espen Kristiansen.
Price decline for refined petrol products
The prices of refined petrol products, including gasoline and diesel, decreased by nearly 12 per cent overall from November last year to the same month this year.
The sharp price drop for refined petrol products in November is attributed to their reliance on the price trends of crude oil, often with a slight time lag. Crude oil prices fell in September and October, leading to lower prices for petrol products in November.
Decreasing price growth for food products sold in the domestic market
Through much of 2022 and 2023, the twelve-month rate within the food industry was around 20 per cent in the domestic market. Since then, inflation has fallen sharply, and during 2024, the twelve-month rate has been between 2 and 6 per cent. And November this year is no exception with a twelve-month rate of 2 per cent.
Despite the slower price growth for food products produced in Norway and sold in the domestic market, prices are still rising. For example, the prices of meat, fish, fruit, and vegetables continue to increase. In contrast, the prices of prepared animal feeds have declined over the past twelve months.
Statistics Norway's Price Index for First-hand Domestic Sales (PIF) provides insights into price trends for imported goods, among other things, and we see that the prices of imported food products are also rising. For imported goods, it is particularly fruit and vegetables that are driving prices upward.
Figure 3 shows the index values for the domestic and import markets for food products. For a long time, the two markets have experienced a similar price trend, but over the past five months, the prices of imported goods have increased at a faster pace. As the graph below illustrates, it is unusual for import prices to rise so much more than prices for goods produced and sold domestically for several consecutive months.
