Norwegian regional network survey indicates strong economic growth in Q4 2018

Norway’s regional network indicates to continued solid growth in production and employment and a tighter labor market. Norges Bank published its fourth quarter regional network report today. The main indicator came in at 1.38, implying a quarter growth of 0.7 percent, which is close to Norges Bank’s forecast of 0.7 percent. The forward looking indicator came in at 1.49, indicating growth at 0.7 percent to 0.8 percent quarterly if anything slightly on the high side to Norges Bank’s 2019 forecast.

Growth is usually solid in all parts of the economy with the exception of the retail sector. Growth in services delivering to household is solid. The indicator for labor market tightness rose. It has been soft given other labor market figures and that the indicator increases must strengthen Norges Bank view that the labor market tightens, noted Nordea Bank in a research report. The indicator for capacity constraints also rose.

According to the survey, employment is expected to rise 0.5 percent in the fourth quarter of this year and 0.4 percent in the quarters ahead. The companies continue to expect wage growth at 2.8 percent in 2018, reassuring after some soft wage statistics lately. The forecast for 2.94 percent wage growth next year is however under the central bank’s forecast for 3.2 percent, the only softness of any significance in the survey. However, Norges Bank is unlikely to give much weight to the survey’s forecast, stated Nordea Bank.

The survey released today indicates towards continued solid growth in production and employment and a tighter labor market.

“We now see the arguments for an about unchanged rate path as strengthen”, added Nordea Bank.