Reopening and fishing boosted the mainland economy

New figures from the National Accounts show that the gross domestic product (GDP) for mainland Norway increased in February. Throughout much of 2021, the economy recovered as society reopened, but new Covid restrictions were introduced in December and lead to a fall in GDP. In mid-February, several restrictions were lifted. Some of the industries that were affected by infection control measures contributed to increased growth in the mainland economy in February.

Traditional fishing was the largest contributor to the growth in February and contributed with 0.5 percentage points. The industry is affected by non-cyclical conditions, which occasionally have a significant effect on monthly national accounts. Excluding fishing, GDP for mainland Norway was unchanged from January to February.

The service industries increased 1 per cent in February. The growth was especially driven by the industries where the activity has been affected by infection control measures, such as accommodation and food services, arts, entertainment and recreation, and passenger transport.

- The reopening in February lead to increased activity in industries that have been heavily affected throughout the pandemic. At the same time, other conditions can also explain the growth. Traditional fishing contributed positively, but there is usually a lot of variation in these figures, says Head of National Accounts, Pål Sletten.

Reduced activity in construction dampened the growth in the mainland economy. Manufacturing and mining also decreased in February. The decline was broadly based and must be seen in relation with the large increase in January. Several manufacturing companies reported to Regional Network in the beginning of February about capacity constraints.

Further increase in total GDP

Measured in fixed prices, petroleum activities and ocean transport increased 1.4 per cent. Thus, total GDP for Norway, including petroleum activities and ocean transport, increased 0.7 per cent in February. Measured in current prices, total GDP increased 30.4 per cent from February 2021 to February 2022.

- Oil and gas prices were still high in February, driven by, among other things, the tense situation between Ukraine and Russia and the invasion on February 24th. Thus, the strong growth in nominal GDP and exports that we have seen since the second half of 2021 continued, says Sletten.

Consumption

Household consumption increased 1 per cent from January to February. Consumption of services increased 3.4 per cent and was mainly driven by consumption groups that have previously been affected by infection control measures. The reopening of the economy in mid-February lead to an increase in consumption of accommodation and food services and recreational and cultural services. Consumption of goods continued to fall in February and decreased by 0.9 per cent. Food and alcoholic beverages decreased due to households shifting their consumption back to services. The lifting of travel restrictions made it easier to travel abroad and to shop in Sweden, which may also explain the decrease in the consumption of food and beverages. Car purchases declined in February and contributed to lower consumption. Households’ consumption of electricity has been considerably lower during January and February 2022 compared to last year, which is due to milder weather in 2022.

Final consumption expenditure of general government increased 0.1 per cent. Developments in final consumption expenditure of general government are based on various indicators but will be revised when accounts for the central government and municipalities for the third quarter become available. These figures must be regarded as preliminary. Given the unusual circumstances, there is greater uncertainty.

Investments

Seasonally adjusted gross fixed capital formation decreased 0.6 per cent in February. The rolling three-month growth from September-November to December-February was 3.8 per cent. Dwelling services decreased by 0.6 per cent in February, and the rolling three-month growth was 2.6 per cent.

In 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.

Export and import

Total export increased 4.4 per cent from January to February, measured in fixed prices and adjusted for seasonal and calendar effects. Exports of crude oil and natural gas was the biggest contributor to the increase in February. There was also an increase in the export of traditional goods and services compared to the previous month. Measured in current prices, the value of export has almost doubled compared to February 2021. This is mainly due to record high gas prices.

Imports increased 3.3 per cent from January to February. Traditional goods and services contributed to the growth.

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.