New seasonally and price adjusted estimates from the national accounts show an increase in the gross domestic product for Mainland Norway in July. Tourism-related industries grew. Services and general government also contributed to the increase. On the other hand, gross fixed capital formation in dwelling services fell, as did the activity in construction.
– Household consumption increased in July. Many people went on vacation, and there was a significant growth in direct purchases abroad by resident households, says Head of the Division of National Accounts, Pål Sletten.
He emphasizes that the figures should be interpreted cautiously.
– Since the main summer holiday takes place during July, there can be less activity in certain industries, and increased activity in others. This can lead to more volatile figures than in regular months. Because of that, figures should be interpreted more cautiously than usual, says Pål Sletten.
Industries
Value added in services including dwelling services grew 0.4 per cent in July, after 0.1 growth in June. Administrative and support service activities contributed the most to the uptick. Real estate activities had a negative development, which dampened growth.
Manufacturing and mining grew 1.5 per cent in July, after a fall of 0.9 per cent in June. Oil refining, chemical and pharmaceutical manufacturing contributed the most.
Production of other goods fell 0.9 per cent. Construction contributed the most to the decline, followed by fishing and aquaculture.
General government grew 0.6 per cent. Central government contributed the most to growth. Local government had only modest growth, and therefore contributed to a smaller degree.
Measured in fixed prices activity in extraction of crude oil and gas increased 0.8 per cent. Gas production rebounded in July, after a reduction due to maintenance in May and June. The oil price increased in July, while the gas price fell. The Norwegian krone also strengthened against the USD. In isolation this contributed to a decline of the gross product measured in current prices, which fell as much as 14.2 per cent. On the other hand, there was increased activity in mining support service activities, with a growth of 0.7 per cent.
Household consumption
Household consumption grew 1.0 per cent from June to July. There was growth in both goods and services consumption, but Norwegians’ consumption abroad in particular contributed to the uptick.
Consumption of goods had a weak uptick of 0.2 per cent. Consumption of transport and electricity contributed to the growth. The increase in electricity consumption occurred because of unusually cold weather in July in large parts of the country. A decline in the consumption of clothing, as well as food and beverages, dampened the increase. Consumption of services increased 0.6 per cent, in particular due to recreation services.
Norwegians’ consumption abroad increased 7.2 per cent, while consumption by non-residents in Norway fell 0.8 per cent.
Export and import
In July exports fell 1.3 per cent, measured in fixed prices. A reduction in the exports of crude oil contributed the most to the fall.
Measured in fixed prices, total imports fell 0.2 per cent. Imports of traditional goods had a flat development, while petroleum products fell. Imports of services increased, which dampened growth.
Investments
Gross fixed capital formation fell 7.3 per cent in May. The rolling three-month decline from December-February to March-May was 1.0 per cent. There has been a decline in housing investment since the beginning of the year, and this decrease continued in July with a fall of 5.4 per cent. The rolling three-month decrease was 9.2 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
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 great upheavals in the Norwegian economy during the corona pandemic may have led to connections between indicators and account figures differing from normal periods. In the aftermath of the corona pandemic, revisions in the seasonal patterns have occasionally been larger than normal. Preliminary monthly and quarterly figures should therefore be treated as being more uncertain than usual.
In some areas, new datapoints have been incorporated for previous months, and the growth for GDP Mainland Norway has been revised up from 0.0 to 0.1 per cent in June. In January growth is revised down from 0.1 to 0.0 per cent. Revisions are due to changes in the seasonal pattern.
In connection with the publication of the quarterly National Accounts for the 3rd quarter, Statistics Norway will publish the final National Accounts figures for 2021 on 23 November 2023. This will provide us with a more complete picture of the Norwegian economy during the Covid-19 pandemic, as well as the preliminary stages of the surprisingly strong price increases we are currently experiencing. The final national accounts for 2021 will replace the previously published preliminary national accounts figures for 2021. While the latter is a projection based on indicators from the last published final annual accounts (2020), the final national accounts are based on much more detailed data sources. The business statements from enterprises are particularly important. They provide a basis for more precise calculations of the value added in the various industries. 2021 will also be incorporated as the new baseline year for the preliminary national accounts projections. This will cause revisions in national accounts figures from 2021 onwards. The revisions are not expected to impact total Norwegian GDP figures significantly, but they can impact value added in certain industries, the composition of supply and demand for Norwegian goods and services, and earnings and wages in particular industries.