Decreased GDP for Mainland Norway in April

New figures from the National Accounts show that the gross domestic product (GDP) for Mainland Norway decreased from March to April. The volatile electricity industry accounted for about half of the decline, but aquaculture and wholesale and retail trade also contributed significantly. Growth in manufacturing, health services and several other service industries dampened the overall downturn.

- There were several large fluctuations from March to April, which, overall, led to a monthly decline. At the same time, we see that the positive trends since February continued in many parts of the economy, says Head of National Accounts Pål Sletten.

During the pandemic, households spent more of their income on purchases of goods in Norway. In April, direct purchases abroad by resident households increased significantly, while consumption of goods and services in Norway decreased. This development, reflecting the reopening of society, results in lower VAT revenues, which further reduced GDP in April. Measured in basic value rather than market value, the monthly decline in GDP for Mainland Norway was 0.2 per cent.

- We see a shift in household consumption, leading to lower VAT revenues. It reduces GDP measured in market value, which includes VAT. Excluding VAT and other taxes, both the development in April and in 2022 in general was more positive, Sletten adds.

In total, the service industries grew by 0.1 per cent from March to April. Financial activities and information and communication contributed most to the growth. Activity also increased in accommodation and food services, transport activities and administrative and support service activities. A decline in wholesale and retail trade significantly dampened overall growth in the service industries, reducing GDP for mainland Norway by close to 0.2 percentage points. Through the pandemic, value added in wholesale and retail trade grew to record highs. So far in 2022, the industry has had a more subdued development, and is at a somewhat lower level than in late 2021.

Manufacturing declined in the beginning of 2022, but in April value added in the manufacturing industries grew by a total of 2.4 per cent, which increased GDP for Mainland Norway by close to 0.2 percentage points. Activity levels increased in the manufacturing of electrical equipment and fabricated metal products, as well as repair and installation of machinery and equipment.

Overall, value added in other goods fell by 4.4 per cent in April, which reduced GDP for Mainland Norway by half a percentage point. It was primarily aquaculture and electricity that contributed to the decline. Value added in aquaculture has generally been lower this year than last year and fell over 16 per cent from March to April. There was a seasonally adjusted decline in both the production and distribution of electricity. Due to the high electricity prices, value added in the electricity industries was nevertheless high, measured in current prices.

Value added in the general government grew by 0.7 per cent in April. Several Covid-related challenges dampened the activity in the health services early in 2022. In April, activity in the health services increased, contributing significantly to the overall growth in the general government.

Since the second half of 2021, there has been a sharp rise in crude oil and natural gas prices. Compared to the peak in March, oil and gas prices fell slightly in April. Measured in current prices, value added in oil and gas extraction was, however, still at historic levels in April. Measured in fixed prices, the extraction industry decreased by 0.1 per cent in April.

Consumption

Household consumption rose by 0.5 per cent in April. The increase was mainly driven by direct purchases abroad by resident households, which increased by 20.4 per cent. Household consumption of goods fell by 0.8 per cent, which was mainly due to lower consumption of groceries. Nevertheless, goods consumption was significantly higher than before the pandemic. On the other hand, household consumption of services declined 0.2 per cent, which mainly were due to lower consumption of recreational services and repair of vehicles. Concurrently, there was an increased consumption of passenger transport.

Export and import

Measured in fixed 2019 prices, total exports decreased by 3.9 per cent. Oil and natural gas exports declined the most, in terms of volume. But measured in current prices, oil and gas exports were still at a high level. Exports, minus oil and gas, had a volume decline of 0.2 per cent. The volume of imports increased by 0.2 per cent in April. Imports of travel services increased sharply. Nevertheless, travels were still at lower levels than before the pandemic.

Investments

Gross fixed capital formation decreased by 4.5 per cent in April. There was a decrease of 0.7 per cent over the three-month period February-April, compared to November-January. After an increase of 4.9 per cent in March, housing investments fell by 7.5 per cent in April, and the rolling three-month growth was 0.3 per cent.

Considering gross fixed capital formation, there is generally weak access to data on a monthly basis. For petroleum investments, investments in industry, mining and electricity, information on planned investments as reported by the companies is used.

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. The macroeconomic picture remains, however, as previously published.