Political Economy


Record quarter for Norwegian industry as the boom could change the interest rate path

Wednesday, 07 August 2013
Norway's industrial output jumped 3.1 percent in June, which means that the second-quarter industrial production ended at record levels, according to Norwegian statistic office, Statistics sentralbyrå (SSB).

The growth in June was significantly greater than expected. Analysts had on average expected a rise of 0.4 percent, according to a consensus poll carried out by Reuters.

Largely, the growth has been driven by the oil-related industry according to  Kjersti Haugland, an economist at DNB MarketsNorway
However, Marius Nyborg Analyst at Handelsbanken Capital Markets points out that the figures for industrial production in recent months has fluctuated considerably from month to month. But if ones looks at the second quarter as a whole, production was up 2.5 percent compared with the previous quarter.

"We believe that Norges Bank is less concerned about the monthly changes in industrial production, and also draws attention to the trend. The latter should indicate stronger activity than the bank itself has set for itself. We also see that the labour market has stabilized as the bank expected, but all in all, the figures relating to real Norwegian economy recently has probably been better than the central bank expected. Our assessment is that the interest rate cut in September will be  put on hold, enter Nyborg in an update on Wednesday morning, report the Norwegian business daily Dagens Naeringsliv.
by Scancomark.com Team

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