Norwegian oil suppliers see slowing growth over the next six months and most areas of enterprise in the Nordic country have lowered growth estimates since the start of the year, a central bank survey showed.
“Compared with the previous round, expectations regarding growth over the next six months have been revised down in all sectors except domestically oriented manufacturing,” Norges Bank said in its regional network report today on its website.
Norway’s $480 billion economy is struggling as the euro-area’s economy contracts for a second year. Unemployment has risen to the highest since May 2010 as companies grapple with a surging krone and manufacturing labor costs that are almost 70 percent higher than the average in the European Union.
The bank said that manufacturing focused on Norway, as well as the export industry and retail businesses foresaw “slightly higher” growth ahead, while oil industry suppliers expected slower growth, the bank said.
Norway’s central bank has signaled it will raise rates early next year after delaying plans to tighten, in part as the strong krone hurts exporters and pushes down import prices. Policy makers meet on June 20 to decide on interest rates.
The slowdown, particularly among oil suppliers, “may be interpreted as a slight rebalancing of the Norwegian economy,” Knut Anton Mork, chief economist at Svenska Handelsbanken AB, said in a note. He expects the central bank to keep its rate unchanged at the next meeting.