The Norwegian economy has increased more than previously estimated. This is shown in final national accounts for 2022, which is published with the updated preliminary national accounts for the period 1st quarter of 2023 to the 3rd quarter of 2024.
– The main story of rapid growth after the corona pandemic is confirmed, but revisions show that the uptick was stronger even stronger than we first estimated, says Pål Sletten, head of national accounts in Statistics Norway.
At the same time, hours worked in 2022 is slightly revised down. This means that productivity, measured as value added per hours worked, increased more in 2022 than previously estimated.
Estimates for gross capital formation in market production is revised down, particularly for service industries.
In tandem with the production of final figures for 2022, the base year for estimating preliminary figures is changed. This results in revisions for the preliminary national account figures for 2023 and 2024.
– The revisions for national account figures from and including 2022 illustrate that preliminary figures must be interpreted cautiously, says Sletten.
Somewhat stronger growth in the mainland economy in the 3rd quarter
Figures for the 3rd quarter has also been published and show a seasonally adjusted growth in GDP Mainland Norway of 0.5 per cent from the 2nd quarter of 2024, measured in fixed prices.
– The growth in the 3rd quarter is somewhat higher than in previous quarters this year, says Sletten.
Total GDP including petroleum activities and ocean transport decreased 1.8 per cent in the 3rd quarter this year. The decrease is due to extensive maintenance on the Norwegian continental shelf.
High growth in manufacturing in the 3rd quarter
In total, value added in manufacturing and mining increased 2.3 per cent in the 3rd quarter. Oil refining, chemical and pharmaceutical manufacturing contributed the most, but machinery repair and installation also increased significantly. Manufacturing has increased several quarters in a row in 2024, but the growth in the 3rd quarter was stronger than before.
Fishing and aquaculture increased an entire 14 per cent in the quarter, particularly due to growth in mackerel fishing. It is important to consider that the marked growth is is partly due to low fishing in the previous quarter.
At the same time, value added decreased in production of electricity, as a consequence of low hydro power production in the quarter.
Construction also decreased in the 3rd quarter. Value added in the industry has continuously decreased every quarter since the 2nd quarter of 2023. The negative development is mainly due to a decrease in housing construction.
Employment increased in the 3rd quarter
Employment increased quickly in the first year after the pandemic and reached a high level in the start of 2023. After that, growth has flattened. In the 3rd quarter of 2024 employed persons increased 0.2 percentage points, seasonally adjusted. This means that there were 16 800 more employed persons than the same quarter in 2023.
Only minor change in consumption
Total household consumption did not significantly change from the 2nd to the 3rd quarter, but the story was complex. Car purchases decreased, after an uptick in the previous quarter. At the same time, service consumption and Norwegians’ consumption abroad increased. If car purchases are excluded, household consumption was 1.1 percent higher in the first three quarters of the year in 2023, on average.
Revisions of national accounts for 2022
The revision of the 2022 figures is somewhat larger than normal. Usually, yearly growth for GDP Mainland Norway has been revised with an order of magnitude of +/- 0.3 percentage points from preliminary to final accounts, see Helliesen (2019) (Norwegian only). At the same time, the main story for the economy remains as previously published. See “Økonomisk utsyn over året 2022” (Norwegian only) for a more detailed description of the economic development in Norway throughout 2022.
High growth and high prices
The year 2022 was characterized by two factors. The last restrictions from the corona pandemic were lifted. This laid the foundation for high growth in household service consumption, industry production, and total employment.
At the same time, prices in the economy increased far more than in several decades. A record-high price increase for natural gas led to Norwegian exports and total GDP increasing to record-high levels.
Measured in current prices total GDP increased 32,6 per cent in 2022, ending up at 5 733 billion NOK. The surplus of Norway’s trade balance to foreign countries increased over 970 billion NOK, ending up at 1 600 billion. Both the growth and level for GDP and the trade balance surplus in 2022 is, by a large margin, the greatest that national accounts has ever measured.
The reopening after the pandemic led to strong economic growth
There was an increase in value added for many industries in 2022, but the growth was particularly strong in services, particularly amongst those that were restrained by infection control measured in the previous years.
Final 2022 figures show that growth for service industries was even larger than estimated in preliminary figures. The positive revision of value added for services in extraction and dwelling services contributed significantly to the revision for GDP Mainland Norway in total.
Increased service consumption, decreased goods consumption
Household consumption measured in volume ended up with an increase of 7.4 per cent from 2021 to 2022. The growth is 1.5 percentage points higher than in preliminary accounts. The reopening after the corona pandemic led to significant growth in service consumption, consumption abroad, and foreigners’ consumption in Norway.
However, Norwegians’ goods consumption decreased after staying on a high level during the corona pandemic. Final figures show even higher growth in service consumption than previously estimated. Positively revised figures for recreational services and dwelling services also contributed significantly to the revision.
Considering downward adjustment for industry gross capital formation
For gross fixed capital formation, final figures show a different development than in preliminary accounts. In total, gross capital formation is revised down from a growth of 5.2 per cent to only 0.3 per cent. The revision is primarily due to final figures showing far lower growth for gross capital formation amongst service industries than estimated in preliminary figures.
For gross fixed capital formation there is low availability for the preliminary accounts in several areas, particularly for service industries. As a consequence, there are usually larger revisions here than for other main figures in the economy. However, the 2022 revision larger than normal.
Increased productivity growth in 2022
Employment rose quickly after the corona pandemic and increased to unusually high levels in 2022, while unemployment was unusually low. Final figures show that the number of employed persons increased 3.7 per cent in 2022, while hours worked increased 3.5 per cent.
The upward adjustment of GDP Mainland Norway, in combination with the downward adjustment hours worked means that productivity measured by value added per hours worked increased more in 2022 than previously estimated. While preliminary figures showed 0.1 per cent, final figures show a growth of 1.4 per cent in the mainland economy.
No large change for manufacturing operation surplus
The operation surplus for manufacturing was 64,5 billions NOK in 2022, measured in current prices. This is an upward adjustment of 3 billion from preliminary accounts. In 2023 the operation surplus for manufacturing was 75,7 billion, which is an upward adjustment of 2 billion from the previous publication.
Base year changed from 2021 to 2022
The preliminary monthly and quarterly national accounts are based on levels and relationships from the most recent final annual accounts and use indicators to calculate the development in various national accounts figures from the base year.
When new final annual accounts are available, the base year for estimated preliminary monthly and quarterly figures is changed. As a consequence, the levels and relationships that form the basis of the calculations are updated.
The price adjustment for fixed price estimations is also changed. Since final national accounts figures for 2022 now are available, the base year for preliminary estimates is changed from 2021 to 2022. That results in revisions for the preliminary figures.
The base year change results in revisions for preliminary figures
As seen in total, the development for preliminary figures for 2023 and 2024 is fairly similar to the last publication on 22nd August 2024. Annual growth for GDP Mainland Norway in fixed prices is revised down 0.1 percentage points in 2023, and quarterly growth in the 1st and 2nd quarter 2024 is revised up 0.3 and 0.2 percentage points, respectively. This means that new figures show somewhat lower growth than previously in 2023 and higher growth in 2024, see table 3.
For other main economic figures the revisions are larger. Annual growth in total GDP in 2023 is revised down from 0.5 per to 0 percent, while growth in the 2nd quarter is upwardly adjusted. The growth in household consumption is approximately unchanged from the previous year and for the quarters in 2024, while service consumption shows higher growth in 2023 and goods consumption shows a larger decrease than previously published.
Several factors cause revisions
There are several reasons why preliminary figures for 2023 and 2024 are revised. Certain revisions are due to economic connections that form the basis for the estimation of the figures being different than previously when 2022 was the base year.
In addition, revisions in the final national account figures for 2022 will lead to the level of preliminary figures in 2023 and 2024 also being revised. For example, final figures for 2022 show lower gross capital formation for several industries than what was previously estimated, and the level in preliminary accounts for 2023 and 2024 is correspondingly downwardly adjusted.
A different reason for revisions is due fixed prices figures, meaning volume, is now adjusted to 2022 prices rather than 2021 prices, as in the last publication. There was great price movements between 2021 and 2022, but these were manifested in different ways in different parts of the economy.
In 2022 prices for natural gas and electricity were record high, and prices for several other goods also had an unusually high increase. This leads to the volume for several connected industries, consumption groups, and export and import goods adjusted to 2022 prices, are significantly higher than if they were adjusted to 2021 prices.
This also means that parts of the economy were prices increased a lot/little from 2021 to 2022 affect the volume development in the economy in total more/less than previously. This particularly affects the development in the petroleum industry, goods-producing industries on the mainland, and foreign trade measured in fixed prices.
Certain revisions is also due to underlying data being incorporated in the estimations of preliminary figures, as part of the national accounts’ standard, running revision cycle.