Producer price index, 15 December 2010

Electricity prices increased by 31.2 per cent from November to December. The rise in electricity prices was caused by a strong jump in the system price at Nord Pool by 45 per cent. As in the previous month, high consumption, due to the dry and cold weather, as well as a low reservoir level can be possible explanations to the system price rise. In addition, the variation in system prices was much higher in December than in earlier periods, manly caused by uncertainty associated with the power production from Sweden’s nuclear power plants. Prices of oil and natural gas also went up substantially in December. The barrel price of crude oil (Brent Blend) was about NOK 550, which is 7.5 per cent higher than in November and the highest price since the top year 2008.

Price rises in manufacturing

With regard to manufacturing as a whole, prices rose by 1.8 per cent from November to December 2010. The price rise was mainly caused by higher prices in the refined petroleum products and basic chemicals, which both increased by 6.1 per cent. Higher prices in basic metals and food products of 2.0 and 1.4 per cent respectively have also contributed to the price increase in manufacturing. The price rise in basic metals was higher in the domestic market, while prices in food products increased the most in the export market, mainly due to a price rise in fish and fish products. Wood and wood products as well as computer and electrical equipment were the two industries that experienced a price fall in December.

Twelve-month growth: prices up 23.9 per cent

PPI increased by 23.9 per cent from December 2009 to December 2010. Higher prices in energy were the most important contribution. Prices in manufacturing showed a sharp rise as well - an increase of 8 per cent in the last twelve months. Within manufacturing, refined petroleum products, basic metals, food industry, basic chemicals and paper and paper products contributed the most.

Annual growth: higher energy prices

PPI rose by 18.3 per cent from 2009 to 2010 compared with the decline of 0.7 per cent from 2008 to 2009. The price increase in energy goods played the largest role in pushing the total annual growth up. Prices in the extraction of oil and natural gas were 32.8 per cent higher in 2010 than in 2009, while prices in electricity, gas and steam increased by 28 per cent in the same period.

Prices in manufacturing rose by 6.5 per cent from 2009 to 2010, mainly due to higher prices in non-ferrous metals, refined petroleum products and food products.