Reduced construction activity and weaker household demand are dampening activity growth, while investment related to energy production, and commercial services continues to rise. A number of contacts also point out that the krone depreciation over the past year has helped improve Norwegian firms’ competitiveness.

Overall, contacts expect somewhat higher activity in Q3. As in previous surveys, the increase reflects a sharp rise in oil services and solid growth in services. At the same time, the decline in construction activity is accelerating and sales volumes in retail trade are falling. Contacts expect overall activity growth to slow in Q4. Contacts in oil services and services sectors expect a continued rise in activity, while contacts in the other sectors expect a decline.

Overall employment will increase through the second half of 2023. The number of contacts reporting capacity constraints continues to fall, while the supply of labour is little changed since May.

Contacts expect annual wage growth of 5.4% in 2023 and 4.6% in 2024. At the same time, contacts report reduced profitability in Q3 compared with the same time in 2022.