Further decline in Mainland GDP

New figures from the national accounts shows that the decline in gross domestic product (GDP) in January continued into February. In January, local and national infection control measures were tightened, which especially affected service industries within transport activities excluding ocean transport, accommodation and food service activities, as well as arts, entertainment and other service activities. The decline continued into February, but not with the same strength as in January. The activity in these industries has declined with the increasing infection control measures throughout the winter and is approaching levels we saw last spring.

Service industries declined 0.3 per cent in February after a 0.8 per cent decrease the previous month. The fall was dampened by an increase in wholesale and retail trade. The increase in wholesale and retail trade must be seen in connection to the strong decline in January.

− Since infection rates increased in the fall, we have seen a relatively flat development in GDP for Mainland Norway. With the decreased activity in January, the last figures from the national accounts indicate a weaker development in the Norwegian economy after the turn of the year, says senior adviser at the National Accounts, Achraf Bougroug.

Weaker growth at the beginning of the year

New calculations of value added tax among other things has resulted in an upward revision of the activity level in December, and a downward revision in January. The previous publication of the national accounts showed a 0.2 per cent decline in GDP Mainland Norway, the revised figures show a 0.8 per cent decline.

− National Accounts figures are more uncertain than usual under the corona pandemic. New information and changed calculations of the value added tax leads to an upward revision of the estimates for GDP Mainland Norway in December, and a downward revision in January, says Bougroug.

The decline in February was broad and covered several industries, both within production of goods and services. Other good production contributed the most to the decline, with lower activity in construction among other things.

Manufacturing fell 1.7 per cent, which is mainly due to lower activity in food products, beverages and tobacco, as well as refined petroleum, chemical and pharmaceutical products. The decline follows a strong growth from the previous month. Manufacturing has picked up the fall from the previous year during the fall and winter. In January and February, manufacturing approached the same levels as in February 2020, which is the last month before the outbreak of the corona pandemic.

Value added in general government was almost unchanged from January to February.

Oil and gas extraction fell 1.6 per cent in February. Total GDP, i.e. including petroleum activities and ocean transport, fell 0.7 per cent.

Consumption

Household consumption usually falls in January and February each year, but in 2021 the decline was stronger than previous years. Adjusted for seasonal fluctuations, consumption fell 0.1 per cent in February after a 2.6 per cent decline in January. Consumption of goods increased 0.2 per cent. Like January, car purchases were the largest contributor to the decline in total consumption. Throughout the pandemic, consumption of goods has been at a high level, and was approximately 8 per cent higher in February 2021 compared to the same period the previous year. There was a broad but weak decline in consumption of services in February. Consumption of services declined by 0.8 per cent and was approximately 17 per cent lower than during the same period the previous year.

Final consumption expenditure of general government was almost unchanged from January to February. Developments in final consumption expenditure of general government are based on various indicators but will be revised when accounts for the central government and municipalities for the fourth quarter become available. These figures must be regarded as preliminary. Given the unusual circumstances, there is greater uncertainty.

Investments

Gross fixed capital formation increased 0.1 per cent in the period December-February compared to the previous three-month period. The three-month growth in housing investment was 1.2 per cent in February.

For gross fixed capital formation there is generally weak access to sound monthly information. For petroleum investments, investments in manufacturing, mining and power supply, information on planned investments as reported by the companies has been used.

Export and import

Exports increased by 0.1 per cent in February and were primarily pulled up by the export of ships and boats. Exports of traditional goods fell 0.7 per cent, where refined oil products and electricity among other things contributed to the decline.

Exports of traditional goods recovered during the summer and fall, and reached a temporary peak in December. Fish, fish products and farmed fish were among the goods that contributed to the growth. This is most likely related to the increased activity aquaculture and the fishing industry as a whole.

Imports of goods and services was unchanged from January to February. The import of crude oil decreased and contributed most to pull down the growth. Imports of traditional goods increased by 1.2 per cent, where engine fuel and metals contributed to the growth.

Revisions

In connection with new monthly figures, there will be revisions. The statistics used will not normally change backwards, but seasonally adjusted series can still be affected. This is a consequence of the fact that the basis for the seasonal adjustment changes when new periods are added. The National Accounts recently published an article on the revisions in the monthly national accounts.

In the current situation, the uncertainty is greater than normal. Revisions are therefor to be expected, also due to potential changes in the background data for previously published months.

In this publication the estimates of value added tax have been revised back to January 2020. This has only led to changes in GDP at market prices and not at basic prices.