Producer price index, 15 August 2007

The total producer price index fell 2.8 per cent from July to August, following six consecutive months of positive growth rates. With nervous financial markets causing uncertainty about the world economy and little disruption to oil production in the Mexican Gulf during the hurricane season, oil prices fell in August. The average price in NOK of Brent Blend was 6.9 per cent lower in August than the previous month. The price of electricity kept falling in August. The spot price at Nord Pool, the Nordic power exchange, was 5.9 per cent down from July, partly due to unusually high water reservoir levels. Thus, the indices for oil and gas extraction and electricity fell 5.2 and 5.8 per cent, respectively.

Refined petroleum products fell

The sub-index for refined petroleum products, which is usually heavily influenced by the oil price, fell 2.0 per cent. Apart from the mentioned developments, all manufacturing sub-indices saw relatively small changes. The largest increase was in the index for food products and beverages, with 0.6 per cent. The index for the manufacturing industries fell a slight 0.3 per cent.

By main industrial groupings the index for energy goods fell by 4.6 per cent. Prices of consumer and capital goods increased 0.5 per cent, respectively, while the index for intermediate goods was unchanged from July to August.

Twelve-month change

The total producer price index was 7.4 per cent lower in August compared with the same month last year. Energy prices were the main reason behind the fall, with an 11.0 per cent decrease in the index of crude oil and natural gas and a massive 69.9 per cent slump in the electricity index since its peak in August 2006. The highest increase over these twelve months was in the index for wood and wood products, with 17.6 per cent.