Recent seasonally and price-adjusted figures from the statistics National Accounts indicates that gross domestic product (GDP) for Mainland Norway fell 0.4 per cent from the previous month. In addition, growth in March is subject to a downward revision from the previously estimated 0.5 per cent, to a newly estimated 0.2 per cent. All monthly figures are preliminary and subject to revision in later publications.
– There are indications that the Norwegian economy is losing momentum. There has been steady growth during parts of 2022, but we have seen gradually lower growth over the last months, and there is now a decline in April, says Pål Sletten, Head of National Accounts.
Monthly figures are volatile and are subject to revisions as more recent data is made available. For this reason, one should consider the figures over several months. The rolling three-month growth for GDP Mainland Norway was -0,1 per cent in the period November-January to February-April.
The decline in April was broad. Consumption in households and non-profit organizations fell 1.8 per cent. Consumption of goods has declined steadily for a long time, but fell 3.3 per cent in April, which was unusually large. In addition, service consumption declined somewhat. As a result of reduced consumption, income from value-added tax fell. This contributed to a decline in GDP Mainland Norway of 0.2 percentage points.
– Easter was in April in its entirety this year. This could lead to slightly unusual fluctuations in the economic activity, compared to what we see in normal months. Easter effects are corrected as part of our seasonal adjustment routine, but there was a more significant uncertainty about core growth than in the rest of the year, says Pål Sletten.
There was a broad decline in industries. Wholesale trade and retail, and construction, were large contributors to the decline.
– There might be indications that increased interest rate and inflation are starting to have an impact on disposable income. The decline in April appear in parts of the economy that are affected by changes in household purchasing power.
Industries
Value added in service industries, including housing services, fell 0.5 per cent from March to April. Real estate activities had the most negative impact, followed by wholesale trade and retail.
Value added in manufacturing and mining fell 0.1 per cent in total. The performance was mixed, and the movements were generally small amongst manufacturing industries. A decline in production of rubber, plastics and mineral products had the most negative impact. Production of metals, electrical equipment and machines dampened the fall.
Production of other goods fell 0.2 per cent. The reduction is primarily due to a fall in construction. Activity in the industry had a weak development throughout last year and has been falling continuously since January this year. The decline was dampened by an increase in the primary sector.
Value added in general government increased 0.3 per cent. Central government had a 0.8 per cent growth, due to an increase in health and care services. Value added in local government decreased 0.2 per cent.
Volume in extraction of crude petroleum and natural gas increased 0.4 per cent. Both oil and gas prices fell in April. This contributed to value added in extraction falling 2.4 per cent, measured in current prices.
Household consumption
Household consumption felt 1.9 per cent from March to April. The reduction was broad, and both goods and service consumption had a negative development.
Consumption of goods in total fell 3.3 per cent. A reduction in the consumption of food and beverages, transportation, and furniture and household articles, contributed the most to the fall. An increase in the consumption of clothes and shoes dampened the decline somewhat.
Service consumption had a weak development, with a fall of 0.4 per cent. Consumption of accommodation and food service activities had the most impact, but passenger transportation and recreation services also contributed. The fall was dampened by an increase in the consumption of dwellings services. Norwegians’ consumption abroad fell 3.3 per cent.
Export and import
Measured in fixed prices total exports fell 1.2 per cent in April. Exports of traditional goods and service exports decline, while exports of petroleum increased.
Total imports fell 2.4 per cent, measured in fixed prices. A reduction in service imports contributed the most to the fall, followed by a reduction in imports of traditional goods.
Investments
Gross fixed capital formation fell 4.2 per cent in April. The rolling three-month decrease from November-January to February-April was 2 per cent. There has been a decrease in investments in dwelling services since the beginning of the year, and this decrease continued in April with a fall of 5.2 per cent.
For gross fixed capital formation, there is low availability of monthly information. For petroleum investments, investments in manufacturing, mining and power supply, information on planned investments is used as reported by the companies.
Revisions
As new monthly and quarterly figures are published, retroactive revisions might occur. The statistics used will not normally be subject to backwards revisions, but seasonally adjusted series can still be affected. This is because the basis for the seasonal adjustment changes when new periods are added.
Throughout the Covid-19 pandemic, from March 2020 to March 2022, new figures were treated as extreme values, and were not included in the basis for the calculation of the seasonal pattern. The many changes in national accounts figures since February 2020 means that new periods that are now added in the seasonal adjustment, from and including April 2022, can produce larger revisions than normal in the seasonal pattern.
In some areas, new basic statistics have been incorporated for previous months, and the growth in GDP Mainland Norway is revised down from 0.5 to 0.2 per cent in March. The revision is due to changes in the seasonal pattern.