Producer price index, 15 January 2008

The average oil price (Brent Blend, in NOK) was 0.2 per cent lower in January 2008 than in December 2007. The price of natural gas in continental Europe increased significantly, however. These changes led to a 5.4 per cent increase in the price index for oil and gas extraction. With no change in the overall price level in manufacturing industries, the producer price index rose by 2.5 per cent from December 2007 to January 2008.

Within the manufacturing industries, price growth rates were both positive and negative. The largest price fall was found in pulp, paper and paper products, with 2.1 per cent. Following a long period of growth, the price of wood and wood products declined by 0.9 per cent. Prices of basic metals continue on a downward trend. A fall of 0.7 per cent from December 2007 to January 2008, mainly caused by lower prices of aluminium products, is the fifth consecutive month of decline. Among industries in which prices rose, prices of metal products had the strongest increase with 2.7 per cent.

Twelve-month change

The total producer price index was 20.4 per cent higher in January 2008 compared with the same month in 2007. The main reason for the strong increase was found in the market for energy goods. Despite moderate changes in the month to December, prices of both oil and electricity were notably higher in January 2008 than in the first month of 2007. The increases were 46.7 per cent (Brent Blend) and 59.7 per cent (spot prices at Nord Pool), respectively. With an increase of 36.2 per cent, prices of refined petroleum products also had a relatively strong increase during these twelve months.

Despite the past month's fall, prices of wood and wood products were 10.8 per cent higher than twelve months earlier. Prices of basic metals, on the other hand, have fallen by 7.0 per cent over the same period.

New weights

With the entry into a new year, the weights used to compute the price indices have been updated. The weights indicate the relative influence of different industries on the overall index, and are based on the industries' share of Norwegian output value in the previous year. The biggest change from 2007 to 2008 is that the weight of oil and gas extraction falls notably, after being relatively high for two years. This is reciprocated by an increase in the weight of manufacturing industries. The industries with the largest increases were those of food products, refined petroleum products and basic metals. Collectively, these three now make up one fourth of the total, while oil and gas extraction, despite the setback, still constitutes 45 per cent of the weight.

For information on the commodity price index for the industrial sectors, see http://www.ssb.no/vppi