Norges Bank

Press release

Regional Network: Activity is levelling off

Regional Network contacts expect activity to remain stable through the first half of 2023. Developments are slightly stronger than contacts expected in the previous survey, but there is considerable variation across sectors. The share of contacts experiencing recruitment difficulties is much lower than in November, and fewer contacts report capacity constraints. At the same time, many contacts still report full capacity utilisation and labour shortages.

Contacts expect overall activity growth to level off in Q1. A sharp rise in oil services activity and a moderate rise in services activity offset the decline in the other sectors. In the period to summer, oil service contacts expect activity growth to pick up, while construction contacts expect a stronger decline. Activity as a whole will remain fairly stable through Q2.

The share of contacts experiencing capacity constraints peaked in 2022 Q1 but has since declined. On the whole, this share is falling further, but there are wide differences across sectors. Only a few contacts report difficulty obtaining intermediate goods, and fewer contacts now report recruitment difficulties than in November.

Contacts expect annual wage growth of 4.6% in 2023. Overall profitability among contacts has improved slightly since a year ago but costs continue to rise markedly. A majority of contacts will therefore increase selling prices fairly substantially in the first half of 2023.

Regional Network Report 1/2023


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Published 16 March 2023 10:00
Published 16 March 2023 10:00