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Erik Johannes Bruce, analyst at Nordea Markets, suggests that Norway’s regional network points to continued strong growth.

Key Quotes

“Growth will slow somewhat, but if anything, less than in Norges Bank’s forecast. This argues for a September hike.”

“Norges Bank has published its Q3 regional network report (business survey). The main indictor (current situation) was 1.48 which indicates a quarterly growth at 0.7-0.8% q/q, close to Norges Bank’s forecast at 0.7%. The forward-looking indicator is 1.35 which indicates growth at 0.7% q/q the coming six months.”

“Growth is generally strong in all parts of the economy except the usual suspect; the retail sector. No surprise, oil delivering industries are especially strong, but strong growth also in the service sector shows the strong momentum in the economy.”

“The forward-looking indicator points to somewhat weaker growth looking ahead.”

“The only weakness we can see in the report is that the indictor for labour market tightness moved sideways. However, the indictor for employment growth is for about 0,4% q-o-q growth. That is well in line with Norges Bank’s forecast and a indicate that the labour market will tighten further.”

“All in all, a network that is very close the Norges Bank’s forecast. It points to a slowdown but if anything, not as strong slowdown as expected by Norges Bank. The report gives no reason for strong concern that the international unrest hits the domestic economy. Norges Bank will hike in September.”