Norway: Continued strong growth – Nordea Markets

Norges Bank has published its Q3 regional network report (business survey) and the main indictor (current situation) was 1.35 which indicates a quarterly growth at 0.68% q/q close to Norges Bank’s forecast at 0.7%, notes Erik Johannes Bruce, Research Analyst at Nordea Markets.

Key Quotes

“The forward looking indicator is 1,43 which indicates growth at 0.73% q/q is somewhat on the upside to Norges Bank’s forecast which implies growth at 0.6% in Q4 and Q1 2019.”

“Growth is generally strong in most part of the economy with the exception of the retail sector. It possibly struggle more with structural problems than more business cycle determined factors.”

“Employment will grow by 0.4% this quarter and 0.5% q/q in the coming quarters according to the survey. This implies that employment growth will increase again after a Q2 somewhat on the weak side (0.3%). Still, the employment picture is somewhat on the weak side to Norges Bank’s view.”

“In sum we view it as very much in line with Norges Bank’s view. The hike next week is a done deal and the main question is how much the rate path will be revised up on the back of the weak NOK and high inflation.”