Price index of first-hand domestic sales, 15 July 2012

In recent months, the PIF have been influenced by falling electricity prices, which have caused a continuous decline in the index since April this year. This trend continued from June to July, when a 23.4 drop in electricity prices gave a decline in the total index. The system price in the Nordic power exchange Nord Pool fell by about 46 per cent. Prices also fell in electricity sold to household consumers. The PPI-index for electricity has not been at such a low level since the summer of 2007.

Besides electricity, lower prices in chemicals and related products was important in bringing the PIF down from June to July, the prices fell by 1.2 per cent.

Higher food prices

From June to July prices in food rose by 0.4 per cent, and reduced the overall decline in PIF. In the import market, that is food products imported to Norway, the price increase may be related to the drought situation in the U.S. which has led to a lower production of agricultural products such as grain, corn and soybeans. This, in turn, can have influenced prices in food groups such as feeding stuff for animals, cereals and cereal preparations as well as vegetables and fruit. In the domestic market, that is food products produced in Norway sold in the Norwegian market, prices also increases in most groups of food. However, lower prices for vegetables and fruits reduced the overall price increase in food and food products. In addition to feeding stuff for animals and cereals, higher prices in meat and meat preparations was important to the overall rise in food prices in the domestic market.

Prices in petroleum and petroleum products increased by 4 per cent, and also moderated the overall decline in the PIF.

Lower prices over the previous twelve months

The PIF declined by 1.7 per cent from July 2011 to July 2012. This was partly due to lower prices in mineral fuels, lubricants and related materials together with crude materials. In these two groups, prices fell by 10.8 and 6.3 per cent respectively. Electricity prices dropped 41.8 per cent compared to July 2011. In addition, prices fell in several groups of manufactured goods such as non-ferrous metals, iron and steel, cork and wood manufactures as well as paper and paperboard products. In these groups prices fell by 11.0, 2.1, 1.4 and 1.6 per cent respectively.

Food prices in the PIF increased by 2.5 per cent from July 2011 to July 2012. The rise in prices for Norwegian-produced food sold in the Norwegian market was relatively small, with an increase of 0.8 per cent. However, imported food experienced a rather sharp rise in prices over the previous twelve months.