Norges Bank Regional Network Survey: Regional network: Prospects for weak growth; In the period to winter, contacts expect growth to slow
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Reduced construction activity and weaker household demand are dampening activity growth, while investment related to energy production, and commercial services continues to rise. - A number of contacts also point out that the krone depreciation over the past year has helped improve Norwegian firms’ competitiveness.
- Overall, contacts expect somewhat higher activity in Q3.
- As in previous surveys, the increase reflects a sharp rise in oil services and solid growth in services.
- At the same time, the decline in construction activity is accelerating and sales volumes in retail trade are falling.
- Contacts expect overall activity growth to slow in Q4.
- Contacts in oil services and services sectors expect a continued rise in activity, while contacts in the other sectors expect a decline.
- Overall employment will increase through the second half of 2023.
- The number of contacts reporting capacity constraints continues to fall, while the supply of labour is little changed since May.
- Contacts expect annual wage growth of 5.4% in 2023 and 4.6% in 2024.
- At the same time, contacts report reduced profitability in Q3 compared with the same time in 2022.
Via Norges
Reaction details (09:08)
- Limited reaction seen in the NOK.
Analysis details (09:08)
- Overall, the release chimes with the prior survey as it points to strong near-term activity with energy/oil underpinning the marked sectoral differences for the economy. Heading into winter, contacts expect activity to slow. The near-term view could arguably be a factor in favour of the Norges Bank lifting its repo path peak from the 4.25% mark forecast in June and expected to be realised on September 21st via a 25bp hike.
- However, the prospects for weak growth ahead serve as a counter and add conviction to those who believe that 4.25% will be the peak.
14 Sep 2023 - 09:00- EnergyImportant- Source: Norges
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