The companies in Norges Bank’s regional network expect economic activity to slow down until winter. Wage growth is expected to be lower in the coming year than in 2023. About Norges Bank’s regional network Four times a year, Norges Bank interviews managers from over 400 companies and organizations about the economic development and future prospects. The network helps to strengthen the analyzes that form the basis of Norges Bank’s monetary policy decisions. The information from the network has proven to give a good indication of the development in the Norwegian economy over time. The direct contact with the managers makes it possible to gather information that is not covered by statistics or captured in a questionnaire. Both qualitative and quantitative information from the network is actively used in the analysis and forecasting work at Norges Bank. The reports are sent to the committee for monetary policy and financial stability ahead of monetary policy decisions. – Clearly weaker than Norges Bank expected Handelsbanken Markets writes in a market update that the report indicates that Norway is now on the brink of a technical recession. The brokerage house believes the figures support the view that there will now be no new interest rate jump next week. – There are clearly weaker growth prospects and wage prospects than what Norges Bank has envisaged. The bank can now feel more confident that price growth is on the way down, says Marius Hov, chief economist at Handelsbanken. Handelsbanken’s Chief Economist Marius Hov believes that recent figures from the central bank mean that the bank can be more certain that the underlying price increase is on the way down. Photo: Mathias Moene Rød / news – I am never sure, but we believe that Norges Bank will now keep the interest rate unchanged, he says. Predicts that the central bank will keep DNB Chief Economist Kjersti Haugland writes in a message to news that the analysts in the markets now also expect unchanged interest rates for the week. She says that the market is now pricing in a probability of an interest rate hike next week at about a third. Thus, the probability of an unchanged interest rate is around two-thirds, as the market sees it now. Nordea’s analysts are also now predicting that Norges Bank will choose not to touch interest rates, says senior strategist Dane Cekov – the central bank has been patient with regard to price growth and will not cool the economy more than necessary. We therefore believe that Norges Bank will keep interest rates steady in December, he says. – Only the weak krone exchange rate indicates that the policy rate may be increased in December, says Cekov. An already pressured construction industry is in for a tough winter, according to interviews the central bank has conducted with company managers. Photo: Gorm Kallestad / NTB Upturn for Oil and gas, construction and construction faces a tough winter The Central Bank’s interviews of the company managers show that there are big differences between the industries. The oil suppliers envisage a clear upswing, while the construction companies expect a significant drop in activity. In the construction industry, the decline is expected to be stronger through the winter. It is the activity in the construction of new homes and commercial buildings that is expected to fall the most. The companies report more available capacity and fewer recruitment problems. Expect weaker wage growth next year The companies in Norges Bank’s regional network expect zero growth in the fourth quarter of this year, and that activity will decrease in the new year. This is shown in the fourth report from the network for the year. The companies expect annual wage growth of 5.4 per cent this year and 4.5 per cent next year. They report that profitability is weaker in the fourth quarter than it was at the same time last year. The figures show that the estimates for wage growth are significantly below what was the central bank’s estimate in the latest monetary policy report. There, the bank expected that wages would rise by 5.2 per cent next year, significantly below what company managers are now predicting.
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Businesses expect lower activity – news Norway – Overview of news from various parts of the country
