Regional network: Rebound in activity
The Covid-19 pandemic and measures to contain it led to a sharp fall in activity this spring. According to Regional Network contacts, activity has risen through summer.
Owing in part to the relaxation of containment measures, both household and corporate demand have picked up. In addition, an unusually large proportion of Norwegians spent their holidays in Norway, which has resulted in a good summer for many household-oriented enterprises. Enterprises expect low activity growth over the next six months. They describe uncertainty as unusually high, and developments ahead will depend largely on infection rates and containment measures.
According to Regional Network contacts, activity has increased by an annual rate of 2.9% over the past three months. A substantial rebound in retail trade and household services in particular is boosting growth, although growth was also reported in construction, domestically-oriented manufacturing and commercial services. However, activity among oil service enterprises and in the export industry continued to fall.
Construction and commercial services expect rising activity ahead, while oil services and the export industry expect a further decline in activity. Household-oriented services also expect a lower level of activity over the next six months. Contacts expect a strengthened housing market, increased public investment and continued high goods consumption to sustain economic activity. On the other hand, contacts believe that low demand from other countries and from the oil sector will dampen growth ahead.
Enterprises have increased their workforces through summer but expect little change in employment in the coming period. Investment plans have been revised down further since the previous survey and enterprises expect a substantial fall in investment in the coming year. The estimate for annual wage growth in 2020 is 1.9%.
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