National accounts, December 2008

After several years of very strong growth in the mainland economy, the growth declined in 2008 and is estimated to have been 2.4 per cent from the previous year. Already at the turn of the year 2007/2008 the growth came to a stop, and there has been a slowdown throughout the year. As a result of among other things a drop in manufacturing, GDP for Mainland Norway fell by 0.2 per cent in the 4th quarter. Reduced activity in the construction industry also contributed to the decline towards the end of 2008.

The drop in manufacturing production in the 4th quarter was mainly caused by reduced activity in production of basic metals and chemical and mineral products. In addition building of ships has declined throughout the second half of 2008. For 2008 as a whole, value added in manufacturing rose by 3.0 per cent.

Increased activity in general government, particularly in civilian central government, dampened the reduction in the mainland economy in the 4th quarter. Value added in general government increased by 3.5 per cent from 2007 to 2008.

Value added in the private service industries was approximately unchanged from the 3rd to the 4th quarter. For 2008 as a whole, the increase was 3.4 per cent from 2007. Business services and wholesale were the main contributors to the annual growth.

In 2008, value added in petroleum activities and ocean transport rose by 0.8 per cent compared to 2007. This led to lower growth in total GDP than in Mainland GDP. However, strong increase in oil and gas production from the 3rd to the 4th quarter led to a growth of 1.3 per cent in total GDP in the 4th quarter.

Continued reduction in household consumption

Household consumption fell by 0.5 per cent in the 4th quarter. This is the third consecutive quarter with negative growth rates. Reduced consumption of cars throughout 2008 pulled down household consumption. The level of purchased cars was, however, at a record level in 2007. For 2008 as a whole, household consumption was up by 1.4 per cent.

Public consumption rose by 3.7 per cent from 2007 to 2008. Increased spending on health and social services in local government contributed most to the growth.

Large investments in 2008

Gross fixed capital formation increased by 3.3 per cent from 2007 to 2008. This was mainly due to large investments in both oil and gas extraction and in parts of manufacturing as production of basic chemicals, refined petroleum and food products. After several years of strong growth in gross fixed capital formation in Mainland Norway excluding general government, the growth declined in 2008. The annual growth in 2008 is estimated at 1.1 per cent while the growth was 9.7 per cent the previous year. Since early 2007, household investment in dwellings has declined. This continued in 2008, and reduced the overall growth in investments.

Gross fixed capital formation in total fell by 0.9 per cent from the 3rd to the 4th quarter of 2008.

Increased trade surplus

Imports were up by 4.2 per cent while exports increased by 0.9 per cent in 2008, measured in constant prices. A strong rise in prices of oil, gas and other energy goods, however, led to a trade surplus in current prices of NOK 464 billion, an increase of about NOK 100 billion from 2007.

Imports of traditional goods fell by 3.2 per cent in the 4th quarter, largely because of reduced imports of metals and cars.

Exports of traditional goods fell by 3.5 per cent from the 3rd to the 4th quarter. An important factor behind this was a reduction in exports of manufacturing goods. This reduction in foreign demand should be seen in connection with the recent economic turnaround internationally.

Employment up by 80 000

Total employment rose by 3.2 per cent from 2007 to 2008, corresponding to about 80 000 persons. This was mainly due to increased employment in local government, wholesale and manufacturing. The number of employed persons grew the first three quarters, but fell by 0.4 per cent in the last quarter of 2008. The drop in the 4th quarter was related to a decrease in most industries with the exception of general government.

Tables

Published tables