As economic growth gradually slows, investment growth is also expected to moderate. Oil prices are of importance for the activity level in the Norwegian economy and central government revenues. In recent years, oil prices have risen sharply. During the summer, crude oil prices rose to more than USD 75 per barrel, partly owing to the conflict in the Middle East and reduced production in Nigeria and the US. The price of oil has fallen markedly during the past few weeks to below USD 60  BIS Review 92/2006  3  per barrel. Futures prices have fallen less and futures prices are now at a good USD 65 per barrel at end-2008. Brent Blend futures prices indicate that oil prices may remain high several years ahead. Export prices for Norwegian natural gas largely follow developments in oil prices with a lag. Since autumn 2005, prices for Norwegian gas exports have risen substantially according to the quarterly reports of the oil companies Statoil and Hydro. In the next few years, natural gas will account for a steadily larger share of total petroleum production on the Norwegian continental shelf. Petroleum investment has reached a high level after three years of strong growth. In 2005, investment was nearly NOK 87 billion. The large Ormen Lange and Snøhvit projects have contributed to high petroleum investment, and high oil prices have fuelled activity even at fields that have been in production for a long period.
Wage growth is now put at 4.5-5.0 per cent in most sectors. It is reported to be even higher in building and construction. Profitability continues to improve in all industries in region South-West. In many industries, profitability growth is somewhat lower than in the previous round. The exception is import-competing manufacturing where profitability is stable and in the service industry where it is improving further. So far, the buoyant activity level in the region has resulted in an accelerating rise in prices in highly sheltered sectors such as building and construction and services. More generally, enterprises report that prices have risen in the past 12 months. Six of ten companies expect prices to continue rising at the same pace during the next 12 months, while more than 25 per cent of the companies expect prices to rise at a faster pace. For the country as a whole, inflation has edged up since the beginning of the cyclical upturn. The yearon-year rise in the consumer price index (CPI) was 1.9 per cent in August. Energy products such as electricity and oil has accounted for a considerable portion of the rise in prices over the past year. Electricity prices, including grid rent and taxes, were 25 per cent higher in August than one year earlier, while petrol prices were close to 11 per cent higher. Since the beginning of 2001, energy prices have exhibited an average increase of over 7 per cent. Variations in energy prices may also lead to wide monthly variations in consumer price inflation.