Norwegian manufacturing expanded last month at the fastest pace since early 2008 amid revived demand from export markets such as Sweden and Germany.
A seasonally adjusted index based on responses from purchasing managers rose to 56, the highest since February 2008, from a revised 54.4 in October, Fokus Bank said today in a statement. A reading above 50 signals expansion. The index was expected to be at 54, according the median forecast in a survey of five analysts.
Norway’s mainland economy, which excludes petroleum and shipping, has expanded for five straight quarters after the government increased stimulus to help keep unemployment at the lowest in Europe and buoy consumer spending. The economy seems to have gained a “firm footing,” the central bank has said.
The only Scandinavian country that isn’t a European Union member has also benefitted from increased export demand from European trading partners, Norges Bank Governor Svein Gjedrem said in an interview yesterday. “Germany and Sweden are very strong and those two countries are big markets for both our exports and our imports, so we cannot say that things are going bad in the European countries.”
Norway relies on sales abroad for about half of its economic output. Germany expanded 0.7 percent in the third quarter from the previous three months when adjusted for seasonal swings, while Sweden surged a quarterly 2.1 percent.
Norway is expected to grow 1.75 percent this year and 3 percent next year, the central bank forecasts.
Still, Norwegian policy makers in October decided to push back an interest rate increase by six months to the middle of 2011 because of prospects for a slower international recovery as a sovereign-debt crisis grips some European countries. Policy makers have left the benchmark rate at 2 percent since May.
Norway’s PMI Index was started by Fokus Bank in 2004 in cooperation with the Association for Purchasing and Logistics. Fokus Bank is owned by Danske Bank A/S, Denmark’s biggest bank.