Gross domestic product (GDP) for Mainland Norway increased 0.2 per cent from the fourth quarter of 2022 to the first quarter of 2023, measured in fixed prices. From February to march GDP Mainland Norway increased 0.5 per cent. This is shown in seasonally adjusted figures from the National Accounts.
– The figures for the first quarter indicate that the Norwegian economy is slowing down, but it is happening rather gradually, and employment is still increasing, says Pål Sletten, Head of National Accounts.
At the end of last year, an unusually large number of cars were sold, and very few were sold in early 2023. This caused large fluctuations in the national accounts' figures for the wholesale and retail industry. Excluding wholesale and retail trade, GDP in Mainland Norway increased 0.4 per cent from the 4th quarter to the 1st quarter.
– Household goods consumption and dwellings investments decreased. At the same time, there was an increase in gross investments in industries and an increased volume in exports, says Sletten.
High prices for energy products and imports have largely driven domestic price increases the last two years. However, the price for natural gas and electricity has been decreasing since the peak in August 2022. At the same time, domestic prices increased in the first quarter.
– Companies have continued to pass on increased production costs to retail prices, and prices increased for goods and services that Norway buy and sell abroad, sells Sletten.
The gross product deflator for Mainland Norway, our broadest available measure for domestic price increases, increased 2.1 per cent in the first quarter. To a larger degree than before, price increases came from other industries than electrical power.
Industries
The gross product in the service industries, including dwelling services, increased 0.1 per cent. Activity increased in many service industries, but the largest positive contributions were technical activities, accommodation and food service activities, and arts, entertainment and recreation. The flat development in the service industries is due to a 2 per cent decrease in wholesale and retail trade. Wholesale trade has generally had a negative development since the middle of 2021, but the decrease in the first quarter is primarily due to a large decrease in car purchases.
In manufacturing and mining, gross product increased 0.4 per cent in total. Activity increased in the parts of manufacturing that delivers goods to the petroleum industry, and decreased in consumption and export-oriented manufacturing industries. Apart from petroleum delivery, activity in manufacturing decreased.
Gross product in other goods production, which consists of the primary industries, electrical power and construction, increased 0.6 per cent in total. A price increase on fish products and electricity led to an increase in gross product in current prices of 6.1 per cent.
Gross product in public administration increased 0.2 per cent in the first quarter, adjusted for seasonal and calendar effects, and measured in fixed prices. This lower growth rate is preceded by three consecutive growth quarters. Gross product for industries in local government increased 0.4 per cent in total, where health and education industries in particular contributed to the increase. On the other hand, central government dampened activity growth in public administration. There was a flat development in central government, with an increase in defence and health services, and a decrease for other industries.
Volume in crude oil and natural gas, including services, increased 0.7 per cent. Petroleum production increased evenly throughout the quarter, while gas production declined somewhat. Growth in services related to crude oil and natural gas was 2.4 per cent, measured in fixed prices.
Consumption
Household consumption decreased 5.4 per cent in the first quarter. Excluding goods consumption, household consumption increased 1 per cent. When measured in current prices consumption decreased 4.6 per cent. In March the consumer price index was 6.5 per cent, compared to the same month the previous year.
Goods consumption decreased 12.3 per cent. Nearly all the decrease can be attributed to the consumption group car purchases, which decreased 50 per cent. This large decrease is due to unusually low registration of new passenger cars after a tax increase on the 1st of January this year. There was also a mild decrease for other goods by 1.1 per cent.
Service consumption increased 0.9 per cent, driven by an uptick in hotel and restaurant services, passenger transport and recreation services.
Norwegians’ consumption abroad increased 4.3 per cent in the first quarter. Foreigners’ consumption in Norway increased 8.3 per cent.
Total consumption in public administration increased 0.5 per cent in the first quarter. Consumption decreased 0.2 per cent in central government and decreased 1.2 per cent in local government.
Investments
Gross investments for Mainland Norway decreased 0.6 per cent in the first quarter. The decrease is broadly based, but investments in dwelling services and in public administration contributed the most. Investments in dwelling services decreased 2.2 per cent in the first quarter.
Exports and imports
Total exports increased 1.7 per cent in the first quarter, measured in constant prices and adjusted for normal seasonal variation. There was growth in all subcategories, traditional goods, crude petroleum and natural gas, ships, platforms and aircraft, and services. Measured in constant prices exports were 7.9 per cent higher in the first quarter of 2023, compared to the same period last year.
Seasonally adjusted volume figures showed an increase in imports of 0.3 per cent in the first quarter. In particular, imports of services contributed to the increase. Imports of traditional goods decreased and dampened growth.
The trade balance in the first quarter is estimated to 237 billion NOK measured in current prices, and therefore fell 135 billion compared to last year.
Employment
Employment increased 0.5 per cent in the first quarter, adjusted for normal seasonal variation. The increase in employment is broadly based, but professional, scientific and technical activities contributed the most to the increase. The number of hours worked increased 0.6 per cent.
Revisions
In connection with new monthly and quarterly figures, there will be revisions. The statistics used will not normally change for previous periods. However, seasonally adjusted series can 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.
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 2021 and 2022 must therefore be regarded as more uncertain than usual.