Norwegian retail sales fall in December, consumer demand likely to be softer in 2020

Norwegian retail sales dropped 0.2 percent in December, adjusted for normal seasonal variations. Consensus expectations was for a fall of 0.6 percent. On a year-on-year basis, retail sales dropped 0.6 percent, where as it fell 1 percent quarter-on-quarter in the fourth quarter of 2019.

The goods consumption index, which also includes car sales, fuel and electricity and correlates more with goods consumption in the national accounts, dropped 2.3 percent sequentially in December and by 0.7 percent quarter-on-quarter in the fourth quarter.

Goods consumption rose 0.3 percent year-on-year in 2019; however, the consumption in December was 1.8 percent lower in December than the average for 2019. Goods consumption is c42 percent of total private consumption in the national accounts.

The underlying trend in the goods consumption indicates falling consumption and there is a negative carry-over to 2020, noted DNB Markets in a research report.

“With negative carry-over households’ demand in 2020 is set to be lower than forecasted and would be an argument for a lower rate path”, added DNB Markets.