The Producer Price Index (PPI) measures price developments within extraction, mining, manufacturing and electricity supply, both in terms of sales to the Norwegian market and abroad. Overall, Norwegian producer prices decreased by 1.8 percent from 2023 to 2024. In this article, we mainly look at the in 2024 for some industries that are important in Norwegian production.
The annual growth rate should not be confused with the twelve-month change published monthly by Statistics Norway (SSB). The twelve-month change in the PPI indicates the growth in the PPI from a given month one year to the same month the following year.
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).
Several manufacturing industries experienced price increases in 2024
Throughout 2024, the twelve-month changes for manufacturing goods produced and sold in the domestic market remained relatively stable, with price changes ranging between 4 and 2 percent over the year. In contrast, the twelve-month change for exported manufacturing goods fluctuated more significantly. During the first half of 2024, the twelve-month rate in the export market ranged between -2 and 2 percent. In this period, twelve-month growth was also higher in the domestic market compared to the export market. However, a shift occurred in the summer: export prices began rising more than prices in the domestic market. 2024 ended with an annual growth rate of 4.0 per cent for exported manufacturing goods and 3.3 per cent for goods sold in the domestic market.
– Although the price growth for the year as a whole is somewhat similar for goods sold in Norway and exported goods, the two markets experienced different price developments throughout 2024. Growth in the domestic market has mostly been decreasing, while the price growth for exported goods increased throughout the year, says Espen Krisitansen head of section at Statistics Norway.
Manufacturing comprises several industries. Figure 1 shows the annual growth of some of the largest industries within Norwegian manufacturing production for both the domestic and export markets combined. Here we can see that the food manufacturing industry, the metal industry, as well as the chemical and pharmaceutical industries experienced relatively similar price development in 2024, while several manufacturing industries saw declining prices the year before. However, the price decreases in 2023 stemmed from exceptionally high levels the previous year.
The annual growth in the manufacturing industry was moderate in 2023 and 2024 compared to the two preceding years, but prices continued to rise. It was particularly food manufacturing that sustained the annual growth in the manufacturing industry, with a growth of 4.1 percent in the combined export and domestic markets in 2024. It is worth noting that price growth within food manufacturing during the 2000s has typically ranged between 1 and 6 percent in most cases. The years 2022 and 2023 were exceptions, with annual growth exceeding 10 percent.
– The price growth in the food manufacturing industry in 2024 was at a relatively normal level compared to the rest of the 2000s, says Espen Krisitansen head of section at Statistics Norway.
Energy prices fell in 2024
The prices for energy goods combined declined 6.7 per cent from 2023 to 2024. In comparison, the price decline in 2023 was as high as 35.4 percent.
Energy goods consist of the extraction of crude oil and natural gas, refined petroleum products, and electricity, gas and steam. The price of electricity, gas and steam dropped by more than 10 percent for the second consecutive year.
The prices for crude oil and natural gasses fell 6.4 per cent in 2024. In comparison the price declined 40.1 per cent the year before.
Although there was a decline in the annual rate for energy goods, the price level remained relatively high compared to the years before 2021. However, unlike manufacturing prices, which have leveled off at a high level in 2024, the prices of energy goods continue to decline. That said, the price drop observed in 2024 was smaller than the decline in 2023.
