Moderate growth in the Norwegian economy continues

Published:

Growth in the gross domestic product (GDP) for mainland Norway was 0.5 per cent in the 2nd quarter of 2018. The Norwegian economy continues to show moderate growth.

Figure 1. Gross domestic product. Seasonally adjusted. Volume indices. 2016=100

Gross domestic product Gross domestic product, Mainland-Norway
Q1-2005 85.99 76.09
Q2-2005 86.44 78.15
Q3-2005 87.16 78.21
Q4-2005 87.36 79.66
Q1-2006 87.92 80.38
Q2-2006 88.03 81.38
Q3-2006 88.93 81.87
Q4-2006 90.56 84.23
Q1-2007 90.63 85.26
Q2-2007 90.62 85.56
Q3-2007 91.79 87.67
Q4-2007 92.79 88.21
Q1-2008 91.66 87.56
Q2-2008 91.7 88.81
Q3-2008 91.54 89.12
Q4-2008 91.82 87.11
Q1-2009 91.08 86.72
Q2-2009 90.28 86.84
Q3-2009 90.34 86.58
Q4-2009 90.38 87.17
Q1-2010 92.16 88.55
Q2-2010 91.18 88.3
Q3-2010 88.92 88.67
Q4-2010 91.42 88.52
Q1-2011 91.45 89.33
Q2-2011 91.07 90.03
Q3-2011 92.54 90.47
Q4-2011 92.59 91.09
Q1-2012 94.57 92.8
Q2-2012 94.79 93.03
Q3-2012 93.42 93.67
Q4-2012 94.18 94.35
Q1-2013 94.39 95.04
Q2-2013 95.07 95.06
Q3-2013 96 95.99
Q4-2013 95.83 96.72
Q1-2014 96.31 96.89
Q2  2014 97.02 97.81
Q3  2014 97.43 98.06
Q4 2014 98.62 98.69
Q1-2015 98.37 98.89
Q2-2015 98.89 99.22
Q3-2015 100.05 99.41
Q4-2015 99.17 99.27
Q1-2016 99.96 99.89
Q2-2016 99.9 99.74
Q3-2016 99.19 99.93
Q4-2016 100.95 100.44
Q1-2017 101.4 101.29
Q2-2017 102.18 101.97
Q3-2017 102.89 102.71
Q4-2017 103.03 103.56
Q1-2018 103.27 103.93
Q2-2018 103.66 104.48

Figure 2. Gross fixed capital formation and consumption. Seasonally adjusted. Volume indices. 2016=100

Gross fixed capital formation, Mainland-Norway Consumption in households
Q1-2005 69.9 73.17
Q2-2005 71.54 74.21
Q3-2005 73.24 75.66
Q4-2005 79.05 74.75
Q1-2006 76.35 76.57
Q2-2006 81.41 78.13
Q3-2006 79.23 79.09
Q4-2006 84.09 79.53
Q1-2007 86.78 81.28
Q2-2007 89.28 82.18
Q3-2007 91.35 83.34
Q4-2007 99.22 84.16
Q1-2008 94.45 85.26
Q2-2008 92.38 85.2
Q3-2008 92.52 83.76
Q4-2008 91.58 82.85
Q1-2009 83.62 82.03
Q2-2009 80.99 83.8
Q3-2009 79.57 84.78
Q4-2009 87.13 85.24
Q1-2010 76.01 86.88
Q2-2010 76.65 86.64
Q3-2010 77.45 87.55
Q4-2010 80.04 88.09
Q1-2011 82.73 88.34
Q2-2011 80.66 88.96
Q3-2011 80.94 89.23
Q4-2011 82.13 90.24
Q1-2012 83.04 91.26
Q2-2012 83.61 92.27
Q3-2012 90 92.94
Q4-2012 93.61 93.09
Q1-2013 86.26 94.48
Q2-2013 90.81 94.74
Q3-2013 90.58 95.45
Q4-2013 92.5 95.63
Q1-2014 89.42 96.01
Q2  2014 91.61 96.8
Q3  2014 90.77 96.96
Q4 2014 90.38 97.68
Q1-2015 89.3 98.25
Q2-2015 90.53 98.94
Q3-2015 90.38 99.24
Q4-2015 91.4 99.64
Q1-2016 95.75 99.84
Q2-2016 98.95 99.68
Q3-2016 102.36 99.67
Q4-2016 102.93 100.8
Q1-2017 106.44 101.54
Q2-2017 106.09 102.08
Q3-2017 107.84 102.7
Q4-2017 107.81 103.45
Q1-2018 102.6 103.41
Q2-2018 106.83 104.49

The growth in mainland GDP is mainly due to increased service production, especially retail trade, business services and information technology. Overall, private service production increased by 1.1 per cent in the 2nd quarter following a 0.7 per cent growth in the three previous quarters. Activity in public administration increased by 0.5 per cent, approximately the same as in the previous quarter.

Construction also made a positive contribution to the rise in the mainland economy. Low production in power supply dampened the growth in mainland GDP by almost 0.2 percentage points in the 2nd quarter.

For manufacturing and mining, the preliminary figures show a slight increase in the 2nd quarter after a clear fall in the 1st quarter. The activity in most industries was at the same level as in the 1st quarter, with the exception of the food industry, which helped to boost growth.

Activity in the petroleum sector fell 0.7 per cent in the 2nd quarter. Overall, GDP increased by 0.4 per cent, compared with 0.2 per cent in the 1st quarter.

Clear growth in household consumption

Household consumption increased 1.0 per cent, following a zero growth in the previous quarter. Commodity consumption increased by 1.5 per cent in the 2nd quarter, mainly due to increased car purchases and increased food consumption. Reduction in consumption of electricity and fuels reduced commodity consumption by 0.9 percentage points and total consumption by 0.4 percentage points.

Service consumption shows stable growth and increased by 0.7 per cent in the 2nd quarter.

Public consumption increased by 0.4 per cent in the 2nd quarter.

Increased investments

Gross fixed capital formation in mainland Norway increased by 4.1 per cent in the 2nd quarter following a decline in the previous quarter. Investments in the production and distribution of electricity explained a large part of the increase, but manufacturing investments were also responsible. Gross government investment in general government increased by 8.5 per cent, and most of this growth is attributable to the delivery of three new combat aircraft in the 2nd quarter.

Investments in dwellings saw a continued decline for the third consecutive quarter, but this must be seen in the context of high housing investments, which have had almost continuous growth from early 2015.

Petroleum investments increased by 13.1 per cent in the 2nd quarter after a decline in the previous quarter. Investments in the 2nd quarter were at the same level as the 4th quarter of 2017. In total, gross investment in fixed capital increased by 5.4 per cent.

Increased exports and imports

Exports of goods and services increased by 1.5 per cent in the 2nd quarter, particularly the export of gas. Exports of traditional goods increased by 0.5 per cent after an approximately equal decrease in the 1st quarter. Increased exports of manufacturing products explained much of the growth. Preliminary figures show growth in exports of services for the second quarter in a row.

Imports increased by 4.3 per cent in the 2nd quarter, with growth in imports of both traditional goods and services.

Lower employment growth

Preliminary calculations show that employment adjusted for seasonal variations increased by 0.3 per cent, or about 7 700 in the 2nd quarter. This was slightly weaker than the 0.5 per cent growth in the 1st quarter. Slowed growth rates can primarily be attributed to weaker growth in employment in public administration. Some industries that have grown a lot over a long period of time, such as the construction industry and business services, also had slightly weaker growth in the 2nd quarter than in the 1st quarter. Growth in these industries was nevertheless high.

Figures for all quarters back to 2016 have been revised

In connection with the release of figures for the 2nd quarter of 2018, the base year is updated with new information from the final national accounts for 2016. In addition, new information has been incorporated for all quarters starting in the 1st quarter of 2017. The new figures for 2016 and 2017 show growth in mainland Norway GDP of 1.1 and 2.0 per cent respectively. For both years, this corresponds to an upward adjustment of 0.1 percentage point. Seasonally adjusted growth in mainland Norway GDP through 2017 has been slightly revised as a result of the new information, while growth in the 1st quarter of 2018 has been revised downwards by 0.2 percentage points. There will be a separate article explaining the revision of the annual figures for 2016 and 2017.

An overview of the revisions in macroeconomic variables is given in Appendix table no. 8. For an overview of developments in the gross domestic product for some of our trading partners, see OECD’s statistics.

How the figures are calculated

The sum of four quarters in the Quarterly National Accounts (QNA) makes up the preliminary annual figures until the Annual National Accounts (ANA) for year t are published in August in year t+2 and incorporated as a new base year in the QNA. Hence, 2016 is the base year in the QNA when publishing data in August 2018.

In both the ANA and QNA, the figures stripped of movements in prices are referred to as volume changes, or fixed price estimates in the QNA, and this is done to identify the underlying cyclical pattern of the economy.

Note that in the time series in volume, the figures from the base year and onwards are fixed price figures, while data prior to the base year are chained volume figures. This implies that additivity in volume is lost prior to the base year.