New figures from the National Accounts show that the gross domestic product (GDP) for Mainland Norway decreased 0.2 per cent in May. The activity was mainly driven by the decline in manufacturing, wholesale and retail trade. On the other hand, the activity in fishing and aquaculture increased and dampened the decline.
– The decline in wholesale and retail trade is in part due to households shifting their consumption back to services, says Head of National Accounts, Pål Sletten.
Since the pandemic started, households have been consuming more goods than services. The reopening of the economy led households to shift spending back to services, and since February consumption of services has been higher than that of goods. Increased cross-border trade has also contributed to lower consumption of goods.
Consumption prices have increased significantly these past months. Household consumption decreased 0.1 per cent in May measured in current prices, and 0.5 per cent measured in fixed prices.
Manufacturing and mining decreased 3.4 per cent in May. The decline was broadly based, but especially refined petroleum, chemical and pharmaceutical products contributed to the decline. The activity in the manufacturing industries is still affected by high prices and lack of input goods due to logistics challenges on the world market.
The activity in the service industries increased 0.1 per cent in May, about the same rate as the previous month. The flattening of the growth must be seen in relation to the significant increase in February and March. Passenger transport was the largest positive contributor, while wholesale and retail trade decreased for the second month in a row. The decline in wholesale and retail relates in part to changes in the consumption pattern in households.
Other goods production increased 0.5 per cent from April to May. After a decline in the previous month, the activity in fishing and aquaculture increased. It was especially fishing of herring that contributed to the upturn. The construction industry, which is still affected by high prices on input goods and a tight labor market, had a decline in activity.
Activity in petroleum activities and foreign shipping increased 3.7 per cent in May. Total GDP for Norway, including oil and gas extraction, pipeline transport and ocean transport, thus increased 0.4 per cent. Measured in current prices, total GDP was 34.9 per cent higher in May of 2022 compared to the same month the previous year.
Consumption
Household consumption declined 0.5 per cent from April to May. The consumption price index (CPI) had a significant growth these past months, which reduced household purchasing power. Consumption of goods decreased 1.3 per cent and was especially driven by lower consumption of clothing and shoes, furniture, food and alcoholic beverages. Nevertheless, consumption of goods is still higher than before the pandemic. Consumption of services increased 0.2 per cent, which was driven by passenger transport, recreational and cultural services.
Consumption abroad has had a strong increase the past months but decreased 0.5 per cent in May. Foreigners’ consumption in Norway decreased 3.8 per cent.
Final consumption expenditure of general government increased 0.1 per cent. Monthly figures in final consumption expenditure of general government are based on various indicators but will be revised when accounts for the central government and municipalities for the third quarter becomes available. These figures must be regarded as preliminary. Given the unusual circumstances, there is greater uncertainty than usual.
Investments
Seasonally adjusted gross fixed capital formation increased 2.1 per cent in May. The rolling three-month growth from December-February to March-May decreased 0.3 per cent. Dwelling services increased 1.9 per cent in May, and the rolling three-month growth decreased 0.7 per cent.
In gross fixed capital formation, there is generally weak access to monthly information. For petroleum investments, investments in industry, mining and power supply, information on planned investments as reported by the companies is used.
Export and import
Exports increased 4 per cent in May, measured in fixed prices. Exports of crude oil and natural gas, ships, oil platforms and aircrafts were the largest contributors to the increase. Measured in current prices, the value of exports was 80 per cent higher in May of 2022 compared to the previous year. This is mainly due to high prices on crude oil and natural gas.
Total imports increased 3.4 per cent measured in fixed prices. Imports of ships, oil platforms and aircrafts as well as traditional goods contributed the most to the growth. Measured in current prices, imports were 35.9 per cent higher compared to May 2021.
Norway’s trade balance is significantly strengthened as a result of high prices on export goods. In May, the trade balance was almost three times as high compared to the previous year.
Revisions
In connection with new monthly figures, there will be revisions. The statistics used will not normally change for previous months. Seasonally adjusted series can, however, be affected, since the basis for the seasonal adjustment changes when new periods are added. The National Accounts has published an article on the revisions in the monthly national accounts.
In certain areas, new underlying statistics have been incorporated for previous months. Consumption of goods is adjusted upwards by 0.2 percentage points in May, compared to the previous publication of the index of household consumption of goods. There are also revisions in exports and imports.
Various minor changes in calculations of gross domestic product lead to GDP for Mainland Norway being revised up by 0.1 percentage points in April. Due to rounding, the GDP growth from March to April is revised up by 0.2 percentage points.
The final annual national accoutnts for 2020 will be published on November 18th.
On Thursday 12 March 2020, the government introduced measures against the spread of the coronavirus in Norway. The seasonal adjustment routine during the pandemic was done in such a way that figures during the crisis are not included when calculating the seasonal pattern. Technically, in the seasonal adjustment routine, this is done by specifying March 2020 and all months up to and including March 2022 as extreme values. This means that new monthly figures from and including April 2022 are included in the seasonal pattern as normal. Statistics Norway's seasonal adjustment is in line with recommendations from Eurostat.