Norwegian production companies get their steam up

Norges Bank mortgage policy rateNorges Bank (Bank of Norway), Headquarters Photo: Norges Bank

Production is increasing more than before, but labour supply has been slightly worse over the last three months.

The companies that are part of Norges Bank’s regional network report that production has grown moderately in the last three months.

But growth has strengthened since the previous period, and will be boosted further in the coming six months, according to the companies’ expectations, says a report.

Growth in public investment, slow down of the fall in the oil sector and increased demand from the private sector have boosted growth.

The feedback from the network is based on the impression that developments in the Norwegian economy have passed the bottom and has begun to recover. Last week, Statistics Norway also announced a likely upsurge for the Norwegian economy over the next three years.

Growth in all sectors
“Growth increases in almost all sectors confirms the main impression. Growth is strong and increasing outside oil-related sectors, and the slow down in the oil sector is declining, says chief analyst Erik Bruce in Nordea Markets.

The proportion of companies reporting capacity constraints and labour supply problems has increased slightly. The contacts state that employment has increased moderately, and they expect moderate employment growth over the next three months.

Stronger than expected
The development seems stronger than Norges Bank expected, says Bruce.
“The growth in capacity efficiency has risen faster than expected by Norges Bank, and is in line with unemployment falling more than expected,” he says.

Overall, the contacts at Norges Bank’s regional network estimate an annual salary growth of 2.5 per cent for the current year, well above the 2.4 per cent limit at the main level.


Source: NTB scanpix / Norway Today