- GDP growth mainland Norway fully in line with Norges Bank’s forecast
- But the details show significant weakness in private consumption and investments
- Stock building/statistical discrepancies have large positive impact on final demand in Q3
GDP growth in mainland Norway was moderate in Q3 at 0.5%, fully in line with Norges Bank’s view. But when looking at the details we find very weak domestic demand. Private consumption was nearly unchanged q/q and investments dropped q/q. The weakness in investments is broadly based, the only exemptions are petroleum investments and housing investments which grew moderately and quite strong growth in public investments. Stock building/statistical discrepancies had a strong positive contribution to final domestic demand. Excluding stock building, final demand from mainland Norway showed a growth of only 0.1%. Add to this that exports of traditional goods also were weak with a drop of 2% q/q.
Looking at the production side construction activity was even stronger than expected, pulling up growth by more than 0.2% points q/q. Manufacturing production was also stronger than expected, pulling up growth by almost 1.5% points. The weakness in the retail sector was even bigger than expected, pulling down growth by almost 1% point.
We judge today’s figures as weaker than the headline growth rate and we believe Norges Bank to some extent will do the same. But next week will bring important key data from the Norwegian economy with no.1 being Norges Banks Regional network report for Q4. Norges Bank’s forecast for GDP growth in Q4 is 0.6% q/q, i.e. stronger than the Q3 growth. We will also get important labour market data and retail sales for October. Norges Bank will need all this information before concluding on the growth picture in Norway and the new interest rate forecast to be published at the MPC meeting 5 December.
Nordea