Continued but dampened growth in October

Gross domestic product for mainland Norway remained unchanged in October, measured in constant prices and adjusted for seasonal and calendar variations. Since the reopening that began in April, GDP for mainland Norway has grown sharply every month, but in October the development was more dampened. The flat development is mainly due to the fact that mackerel fishing, which usually occurs in October, was unusual in early 2021. Thus, seasonally adjusted activity in the industry fell sharply this month. In part, the slow growth may also be due to the fact that much lost activity from the corona shock has been recovered since the reopening began this spring. Apart from traditional fishing and the production of electric power, GDP for mainland Norway grew by about 0.3 per cent, which is still somewhat weaker than the growth rates seen in the last six months. Growth was otherwise broadly based among industries that have been affected by the pandemic, especially the service industries, but also parts of industry and other commodity production.

- The development in October was more dampened than in previous months, but the figures still show signs of catching up. Many service industries grew at the same high rate we have seen since the spring, when the reopening began in full. The accommodation and catering business, as well as culture, entertainment and other services are finally back to pre-pandemic levels. Consumption of services is also higher for the first time than before the pandemic, says Pål Sletten, head of the National Accounts at Statistics Norway.

Activity in the service industries grew 1.5 per cent in October. Through the pandemic, the infection control measures have affected service industries with a lot of one-on-one contact, as well as industries associated with tourism to a particularly large extent. Since the reopening began in full this spring, the recovery in these industries has driven the development in GDP for mainland Norway. The upswing in the service industries in October was in line with the monthly growth rate seen since April 2020. Business services, which had a weak development during the summer, had particularly strong growth in October. The accommodation and catering business also continued the recovery. These two areas contributed just over 0.3 percentage points to the overall GDP growth for Mainland Norway. From September to October, both the accommodation and catering business, and culture, entertainment and other services, grew to pre-pandemic levels. Thus, business services and transport excl. ocean transport were the only service industries that were still somewhat below pre-pandemic levels, despite further growth in October.

Other goods production fell in October. The decrease is mainly due to the fact that the majority of the mackerel quota, which is usually caught in October, was landed earlier than usual in 2021. Thus, the volume was unusually high in the third quarter, but unusually low in October. This year's mackerel fishery is discussed in more detail in the publication of the third quarter of 2021. Electricity production also reduced activity in other commodity production in October. Text box 3.2 in the publication of the third quarter describes in more detail how the traditional fishing and electricity production, which are volatile, non-cyclical industries, sometimes have a large impact on the monthly accounts. The construction industry, which has had a weak development earlier in 2021, grew in October.

Gross product in manufacturing and mining rose 0.5 per cent in October. It was mainly parts of the supplier industry, including the production of machines and electrical equipment, as well as the furniture industry, that grew. The supplier industry has had sharply reduced activity through the pandemic, and October was the first month of growth since June. The production of chemical raw materials also grew sharply, making up the largest single contribution to overall manufacturing growth. Processing and preservation of fish, on the other hand, declined, and curbed manufacturing growth, which can be seen in connection with the unusually early fishing, and high slaughter levels in the third quarter.

Oil production has had a positive development through the pandemic. The level was also high in October. Petroleum activities are usually characterized by production stoppages and maintenance work in September, but in September 2021 the gross product was unusually high. Thus, there was a seasonally adjusted decline of 10.8 per cent for petroleum activities and foreign shipping in October. Unadjusted, the volume increased from September to October, and the unadjusted gross domestic product was about 13 per cent higher in both months compared with the same periods in 2020. The seasonally adjusted decline in oil and gas also resulted in a decline of 1.8 per cent in total GDP incl. petroleum activities and ocean transport.

At the same time, the rise in oil and gas prices continued in October, which resulted in strong growth in oil exports, measured in current prices. The value of oil exports thus reached a record high in October, and Norway's trade balance and foreign exchange ratio were significantly strengthened.

Consumption

Household consumption rose for the seventh month in a row, growing 1.1 per cent in October. Consumption is thus somewhat higher than before the pandemic occurred.

Consumption of services, which fell sharply when the virus arrived in the country, has gradually recovered. Growth continued in October and service consumption thus exceeded the pre-pandemic level for the first time. It was especially hotel and restaurant services together with leisure services that helped to lift service consumption.

Consumption of goods fell by 2.2 per cent in October, but was still well above the levels in February 2020. It was particularly low consumption transport that accounted for the decline. Electricity consumption and food consumption also fell.

Norwegians' consumption abroad grew further in October, but continued to be about 60 per cent lower than before the pandemic. Foreigners' consumption in Norway also grew, but somewhat weaker than in previous months.

Consumption in general government fell 0.2 per cent. The development in public consumption is based on various indicators, but will be revised when the accounts for central and local government for the fourth quarter are available. They must therefore be considered as preliminary. Given the unusual conditions, the uncertainty is great.

Export and import

In October, exports fell 3.4 per cent measured in constant prices. Exports of crude oil and natural gas have grown sharply in recent months, but were seasonally adjusted 8.4 per cent lower in October than in September, measured in constant prices. Apart from the weak development in oil and gas volumes, total exports at constant prices were roughly unchanged between September and October. Exports of traditional goods, on the other hand, continued to grow, and were 2.3 per cent higher than in September. Among the traditional goods, exports of metals and petroleum products contributed most to growth.

Exports of services have been low through the pandemic, especially due to the restrictions that have affected travel traffic. In 2021, service exports have gradually had a positive development, which continued in October, largely due to strong catch-up in the export of travel traffic. Nevertheless, service exports were still lower than before the pandemic.

The sharp rise in crude oil and natural gas prices seen recently continued in October. In current prices, exports of oil and gas thus rose almost 17 per cent. Figures from foreign trade in goods showed oil and gas exports at a record high of 105 billion in October. Due to inflation, total exports at current prices grew just over 10 per cent from September to October.

Imports at constant prices fell 1.2 per cent in October. Imports of goods declined, mainly due to low imports of civilian ships and boats, compared with September. On the other hand, there was growth in service imports, especially driven by travel traffic.

Imports have not had the same strong price growth as exports. Although the price of some imported goods, such as electric power, has risen, imports in October fell by a total of 1.4 per cent current prices. As a result, Norway's terms of trade and trade balance with other countries strengthened significantly in October.

Investments

Gross fixed capital formation was unchanged from September to October. The rolling three-month growth from May-July to August-October was 1.3 per cent. Housing investment grew for the second month in a row, but somewhat weaker than in September. In the three-month period August-October, housing investment was 1.8 per cent lower than in the period May-July.

For 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.

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.

During the corona pandemic, the uncertainty is greater than normal. One must therefore be prepared for major revisions, also because one can get changes in the background material for the calculations. Growth in mainland Norway's GDP was revised up from 0.6 to 0.8 per cent in September.

In certain areas, new underlying statistics have been incorporated for previous months. The macroeconomic picture remains, however, as previously published.