Economic Survey 3-2008

The quarterly national accounts figures confirm previous impressions that the Norwegian economy passed a peak at about the end of last year. Household demand and mainland business investment in particular are now growing more slowly than in 2007. Housing investment has been falling for a while, at a rate that intensified in the first half of 2008. However, public sector spending on goods and services continues to provide stable and positive growth impulses, as does petroleum sector investment. Although employment growth has moderated, there are still no definite signs of an increase in unemployment. Nor can they be expected at such an early stage of a downturn, but the number of lay-offs has increased and the supply of vacancies has declined. Inflation has risen perceptibly, not least as a result of high energy and commodity prices. Inflation excluding energy products has also risen, due to strong wage growth as a result of a tight labour market and high corporate profitability. In consequence, monetary policy has been gradually tightened.