Declining growth rate for mainland GDP through Q3

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Seasonally adjusted figures from the national accounts show that Mainland Norway's GDP rose 0,6 per cent in September, making it the fifth consecutive estimation of monthly growth. The level of activity in September was still close to 3 per cent lower than in February. Q3 2020 showed a growth of 5,2 per cent.

Following a sharp fall in activity in the Norwegian economy in March and April, activity picked up in the following months. The easing of infection control measures resulted in strong growth in May and June, according to new figures from the National accounts. The monthly growth rate then slowed through Q3.

- In September, just over half of the decline since February was recovered, with an activity level close to 3 per cent lower than before the Covid-19 pandemic broke out. The strong growth in Q3 reflects this recovery, says head of the National Accounts at Statistics Norway, Pål Sletten.

Growth was strongest immediately after the most stringent infection control measures were relaxed. Throughout Q3, this effect was gradually exhausted. In September, many industries still had significantly lower production than before the pandemic hit Norway.

- This means that when infection rates increased again in October and infection control measures were tightened, the Norwegian economy was still far from a normal situation. In Q3, employment was 80,000 below pre-pandemic, Sletten continues.

Figure 1. Gross domestic product and household final consumption expenditures. Rolling three-month sum. Seasonally adjusted. Volume indices. 2018=100

Gross domestic product, Mainland-Norway Household final consumption expenditures
Jan. 2016
Feb. 2016
Mar. 2016 95.60 95.70
Apr. 2016 95.50 95.40
Mai 2016 95.40 95.30
Jun. 2016 95.20 95.30
Jul. 2016 95.10 95.40
Aug. 2016 95.00 95.50
Sept. 2016 95.30 95.70
Oct. 2016 95.50 96.10
Nov. 2016 95.60 96.40
Dec. 2016 95.90 96.70
Jan. 2017 96.00 97.10
Feb. 2017 96.50 97.60
Mar. 2017 96.70 97.80
Apr. 2017 96.90 97.60
Mai 2017 97.10 97.80
Jun. 2017 97.40 98.00
Jul. 2017 97.70 98.20
Aug. 2017 97.80 98.00
Sept. 2017 98.00 98.30
Oct. 2017 98.20 98.60
Nov. 2017 98.50 99.10
Dec. 2017 98.80 99.50
Jan. 2018 99.10 99.20
Feb. 2018 99.30 98.90
Mar. 2018 99.40 99.00
Apr. 2018 99.70 99.60
Mai 2018 99.80 100.20
Jun. 2018 99.90 100.40
Jul. 2018 100.00 100.30
Aug.2018 100.10 100.30
Sept.2018 100.10 100.20
Oct. 2018 100.50 100.50
Nov. 2018 100.80 100.50
Dec. 2018 101.30 100.80
Jan. 2019 101.50 101.00
Feb. 2019 101.60 101.00
Mar. 2019 101.80 101.30
Apr.2019 101.90 101.20
Mai 2019 102.20 101.40
Jun. 2019 102.40 101.40
Jul. 2019 102.70 101.70
Aug. 2019 102.90 101.90
Sept. 2019 103.10 101.80
Oct. 2019 103.10 101.70
Nov. 2019 103.10 101.80
Dec. 2019 103.10 101.50
Jan. 2020 103.00 101.30
Feb. 2020 103.00 101.20
Mar. 2020 100.90 97.10
Apr. 2020 97.30 90.70
Mai 2020 94.50 85.60
Jun. 2020 94.80 87.00
Jul. 2020 97.10 91.70
Aug. 2020 98.80 94.30
Sep. 2020 99.70 95.30

Figure 2. Gross domestic product and household final consumption expenditures. Monthly. Seasonally adjusted. Volume indices. 2018=100

Gross domestic product, Mainland-Norway Household final consumption expenditures
Jan. 2016 95.80 96.10
Feb. 2016 95.30 95.70
Mar. 2016 95.20 95.20
Apr. 2016 95.30 94.90
Mai 2016 95.00 95.50
Jun. 2016 94.60 95.20
Jul. 2016 95.10 95.30
Aug. 2016 94.90 95.70
Sept. 2016 95.30 95.70
Oct. 2016 95.70 96.70
Nov. 2016 95.40 96.60
Dec. 2016 95.90 96.50
Jan. 2017 96.20 98.00
Feb. 2017 96.70 98.00
Mar. 2017 96.60 97.10
Apr. 2017 96.80 97.50
Mai 2017 97.30 98.40
Jun. 2017 97.50 97.70
Jul. 2017 97.60 98.00
Aug. 2017 97.70 98.10
Sept. 2017 98.10 98.40
Oct. 2017 98.20 98.90
Nov. 2017 98.70 99.60
Dec. 2017 99.00 99.60
Jan. 2018 98.90 98.00
Feb. 2018 99.30 98.90
Mar. 2018 99.60 99.90
Apr. 2018 99.60 99.80
Mai 2018 99.70 100.60
Jun. 2018 99.80 100.50
Jul. 2018 100.00 99.60
Aug.2018 100.00 100.60
Sept.2018 99.80 100.00
Oct. 2018 101.00 100.60
Nov. 2018 100.90 100.70
Dec. 2018 101.30 100.90
Jan. 2019 101.60 101.10
Feb. 2019 101.40 100.70
Mar. 2019 101.70 101.70
Apr. 2019 102.10 101.00
Mai 2019 102.20 101.20
Jun. 2019 102.30 101.90
Jul. 2019 102.90 101.70
Aug. 2019 102.90 101.80
Sept. 2019 102.80 101.70
Oct. 2019 102.90 101.40
Nov. 2019 103.10 102.00
Dec. 2019 102.60 100.70
Jan. 2020 102.70 100.80
Feb. 2020 103.00 101.70
Mar. 2020 96.40 88.50
Apr. 2020 91.90 81.50
Mai 2020 94.50 86.40
Jun. 2020 97.50 92.70
Jul. 2020 98.70 95.70
Aug. 2020 99.70 94.20
Sep. 2020 100.30 95.60

Positive development for several industries

Behind the strong growth from Q2 to Q3 2020 is a positive development in almost all industries, see figure 3. Several of the service industries that experienced the sharpest decline in March and April, experienced the strongest recovery, but were also well below the level from February. Industries with weaker percentage declines at the beginning of the crisis, such as manufacturing, construction, and education did not see a corresponding percentage growth, but were all at or just below the activity level from February.

Extraction of crude petroleum and natural gas increased almost 2 per cent in Q3 and was about 5 per cent above the level from February. During the months in the third quarter, 55.2 million standard cubic meters of oil equivalents (MSm3 o.e.) were produced, which is just over 15 per cent above the level in the third quarter of 2019.

Total GDP for Norway, including oil and gas extraction, transport via pipelines and ocean transport, rose 0.6 per cent from August to September. Q3 saw a 4.6 per cent growth.

Figure 3. Selected industries. Constant 2018-prices. Monthly. Change in volume from the previous period (per cent)

September August July June May April March Feb - Sep
Fishing and aquaculture 2.2 -8.9 -2.1 4.1 -0.4 9.7 -5 -1.5
Professional, scientific and technical activities 0.6 2.1 -2.5 3.1 -1.9 -1.6 -3.5 -3.7
Wholesale and retail trade 1.6 0.5 1.7 0.7 4.9 -2.4 -4.3 2.4
Manufacturing -1.9 5.5 0.7 -0.9 -1.6 -2.7 -3.6 -4.6
Education 1 2.6 0.7 2.6 2.6 -3.4 -5.2 0.7
Gross domestic product Mainland Norway 0.6 1 1.2 3.2 2.8 -4.6 -6.4 -2.7
Construction 1.3 0 1.8 3.9 2.8 -4.7 -8.1 -3.7
Health and social work 0.6 1 -0.47 10.4 11.8 -8.5 -13.6 -1.4
Administrative and support service activities 8.1 23.8 -17.1 -2.5 -14.8 -12.4 -6.8 -24.7
Transport activities excl. ocean transport -0.3 0.2 -0.2 12 10.4 -18.9 -18.5 -18.4
Arts, entertainment and other service activities 0.1 3.6 6.2 23.7 58.2 -43.6 -36.4 -22.7
Accommodation and food service activities 0.1 -3.4 32.8 51.1 23.8 -45.1 -41.9 -23.3

Consumption

Household consumption increased 1.6 per cent in September, giving an overall growth of 9.6 per cent in Q3. Consumption of goods grew 6 per cent in Q3 and was about 10 per cent higher than in the Q4 2019. Consumption of services saw a Q3 growth of 12.4 per cent, which reflects the gradual reopening of businesses in the second quarter, as well as further easing of restrictions in Q3.

Consumption in central government rose 3.3 per cent in Q3 after a fall of about 2 per cent in Q2. The recovery in the health industry explains most of the growth in Q3. Consumption in local government rose 2.6 per cent in Q3, driven by growth in the consumption of education and daycare services.

Investments

Gross investments for Mainland Norway have declined relatively steadily since the latter half of 2019. They declined further in Q3 and were thus 7.5 per cent lower than in the same quarter in 2019. The corona pandemic may have affected the willingness to invest in enterprises, but one must also see the decline in connection with the fact that there were large investments within manufacturing and electric power generation industries in 2019 and many of the projects have been completed. Housing investment has fallen since the beginning of 2017, and the steepest decline was in the second half of 2019. Throughout 2020, development has been relatively flat, with a decline of 1.5 per cent from the second to the third quarter.

Exports and imports

Total exports grew 1.9 per cent in September, primarily driven by increased exports of natural gas. In September, the level of exports of goods and services was just over 3 per cent lower than in February. Total exports rose by almost 5 per cent in Q3.

After strong growth throughout the summer, there was weak growth in imports of goods and services in September. Unlike exports, imports are a long way from recovering. The level of total imports in September was about 11 per cent below the level in February. For Q3, there was an increase in imports of goods and services of 10.3 per cent.

Employment

Total employment fell 0.4 per cent in Q3, adjusted for normal seasonal variation. The sharpest decline came in Q2 2020 and is now estimated at 2.5 per cent.

Revisions

In connection with new monthly figures, there will be recurring revisions. The statistics used will not normally change backwards, but seasonally adjusted series can still be affected. This is a consequence of the fact that the basis for seasonal adjustment changes when new periods are added. The National Accounts has recently published an article on revisions in the monthly national accounts.

Since the previous publication of monthly national accounts in October, the monthly and quarterly course for GDP mainland Norway is somewhat revised. The decline in Q1 2020 has been revised up from -2.2 percent to -2.1 percent and Q2 2020 has been revised up from -6.3 per cent to -6.0 per cent.

The seasonal adjustment routine has been adjusted during the Corona-crisis

Thursday 12th of March 2020 the Norwegian government introduced actions against the spreading of the Corona-virus in Norway. The seasonal adjustment routine during the Corona- crisis is done in such a way that the figures from the start of and during the crisis (from March), are not included in the calculation of the seasonal pattern. Technically, in the seasonal adjustment routine, this is done by specifying March and following months as outliers.

The seasonal adjustment routine of Statics Norway is in line with the recommendations of Eurostat.