New figures from the National Accounts show that GDP Mainland-Norway increased by 0.1 per cent from the second to the third quarter, measured in fixed prices. In September, GDP grew by 0.3 per cent, but the growth in July and August has simultaneously been revised down somewhat compared to previous publications.
– The Norwegian economy is now in a business cycle phase where weak demand slows down growth, says Head of National Accounts at Statistics Norway, Pål Sletten.
High prices and rising interest rates have reduced households purchasing power through 2022 and 2023. This has slowed down the growth in consumption, and the construction of dwellings has fallen sharply. To some extent, this is counteracted by the rise in oil investments. Growth in employment has almost stopped.
A couple of special circumstances affected the Norwegian economy in the third quarter. There was extreme weather in August and heavy rainfall during the quarter. Although the storm caused damages in parts of the country, it had little effect on the economy.
– The large amount of rainfall particularly affected activity in agriculture. It also contributed to high hydroelectric power production. Excluding the unusual development in the agricultural and electricity industries, there would have been a decrease of 0.1 per cent in GDP Mainland Norway in the third quarter, says Sletten.
High prices for energy products were one reason for the general price increase last year, but so far this year the prices of petroleum products and electricity have fallen. Compared to the prices a year ago, the prices have now been reduced by around 60 per cent.
Overall, prices in the Norwegian economy grew 0.9 per cent from the second to the third quarter, measured by the gross product deflator for mainland Norway, the part of the price increase that is not due to changes in import prices.
The price contribution from exposed industries now particularly large. According to preliminary figures, profitability in manufacturing and other sectors exposed to competition appears to be high. The price increase in the sheltered sector was also significantly higher in the 3rd quarter than it has been previously.
Industries
Gross product in the service industries, including dwelling services, increased 0.1 per cent in the third quarter. Activity increased in most service industries, but wholesale and retail trade and technical activities declined.
Other goods production, which consists of the primary industries, electricity production and construction, increased 1 per cent. Heavy rainfall and the extreme weather «Hans» affected the electricity production and agriculture in the third quarter. The gross product in agriculture fell, while the gross product in electricity production increased. The negative development in construction continued and the gross product fell 0.6 per cent.
Gross product in manufacturing and mining increased 0.4 per cent. Activity has increased in the industrial sectors that supply goods to the oil industry. In addition, food industry increased. In the industrial sector, petroleum refining and chemical and pharmaceutical industry declined the most.
Gross product in public administration fell 0.2 per cent in the third quarter, adjusted for seasonal and calendar effects, and measured in fixed prices. There was a slight increase in the activity in central government, but a decline in local government. Public administration, defense, and education contributed to the increase in central government. In local government, residential care activities and nursery services declined the most.
Measured in fixed prices, gross product in the extraction of crude oil and natural gas, including associated services, fell 2.4 per cent. This is mainly due to maintenance of the gas infrastructure in the North Sea. Services related to crude oil and natural gas increased 0.9 per cent, measured in fixed prices.
Consumption
Household consumption increased 0.5 per cent in the third quarter, measured in fixed prices. Consumption growth was driven by Norwegians' consumption abroad and tourism-related services.
Goods consumption decreased 0.2 per cent. Consumption of clothes and shoes and furniture and appliances contributed most to the decline. Service consumption increased 0.3 per cent and recreational services and hotel and restaurant services contributed the most to the increase. The increase in recreational services came from an uptick in package tours.
Norwegians’ consumption abroad increased 6.7 per cent in the third quarter. Foreigners' consumption in Norway increased 5.1 per cent.
Consumption in general government increased 0.9 per cent. Growth in local government accounted for the largest contribution, but consumption also increased in central government.
Investments
Gross investments for Mainland Norway fell 3.8 per cent in the third quarter. The decrease is mainly due to investments in dwelling services, but also investments in public administration and services fell. Investments in the extraction of crude oil and natural gas and industry and mining increased. Investments in dwelling services fell 8.7 per cent.
Exports and imports
Total exports fell 0.8 per cent in the third quarter, measured in fixed prices and adjusted for normal seasonal variation. Export of traditional goods, crude oil and natural gas decreased. The decline for traditional goods is due to lower exports of industrial products. The export of services increased, mostly due to an increase in travel services and financial and business services.
Seasonally adjusted volume figures showed that imports fell 2.5 per cent. The import of traditional goods, including industrial products, contributed to the decline. Imports of services increased and dampened the decline.
Employment
Employment increased 0.1 per cent in the third quarter, adjusted for normal seasonal variation. Extraction of crude oil and natural gas, as well as professional, scientific and technical services contributed most to the growth, while administrative and support service activities and construction decreased the growth. The number of hours worked increased 0.2 per cent.
Revisions
In connection with new monthly and quarterly figures, retroactive revisions will occur. New information is occasionally incorporated in the calculation of selected national accounts figures. In addition, the seasonal pattern will change as new periods are added.
The major changes in the Norwegian economy during the COVID-19 pandemic may have led to relationships between indicators and accounting figures being different than in normal periods. The quarterly figures in 2022 and 2023 must therefore be regarded as more uncertain than usual. In the aftermath of the corona pandemic, revisions in the seasonal patterns have occasionally been larger than normal.
In connection with the publication of figures for the third quarter of 2023, the base year has been updated with new information from the final national accounts for 2021. New information from and including the 1st quarter of 2021 has been incorporated for all quarters.
The increase in Mainland economy for 2021 has been revised up from 4.2 to 4.5 per cent, measured in fixed prices, while 2022 is unchanged.