Norges Bank Survey Points to 0.3% Norwegian Output Growth in Q3 and Q4

Norges Bank’s Regional Network contacts expect Norwegian output to grow 0.3% in both the third and fourth quarters of 2026, pointing to a steady but moderate pace of expansion through the second half of the year. The survey also showed a further easing in capacity constraints and recruitment difficulties, even as businesses continued to expect relatively strong wage growth this year.

The latest round does not amount to an official gross domestic product forecast. The Regional Network captures the expectations of businesses, organisations and local authorities across Norway, giving the central bank a timely view of demand, capacity and labour-market conditions before official data are complete. Interviews for Report 3/2026 were conducted from August 3 through September 3.

In its September 17 release, Norges Bank said contacts see improved household purchasing power, higher defence spending and data-centre construction as important supports for activity. Weak construction remains a drag. Overall expectations for third-quarter growth were little changed from the previous survey, and every sector except oil services expects activity to increase ahead.

Businesses see moderate growth holding through year-end

The 0.3% estimates for both quarters suggest that firms do not expect a sharp acceleration or contraction before the end of 2026. That is broadly consistent with the survey’s recent pattern. In June, Regional Network contacts expected total output growth of 0.3% in the third quarter after lowering their estimate for second-quarter growth to 0.2% from 0.4%.

Official national accounts provide a separate benchmark for the broader economy. Statistics Norway reported that mainland GDP increased 0.3% in the second quarter from the previous quarter on a seasonally adjusted basis. The same release showed household consumption declining 0.2% while gross fixed capital formation rose 4.4%. The survey’s output measure and mainland GDP are not interchangeable, but the figures both point to modest underlying growth rather than a large change in momentum.

The latest Statistics Norway national accounts are also a reminder that the composition of growth matters. Norges Bank’s contacts describe stronger demand tied to household purchasing power, defence-related activity and data centres, while subdued building activity continues to weigh on construction. The central bank said investment among contacts is expected to be somewhat higher in 2026 than in 2025, with investment growth picking up in 2027.

Oil services remain the main exception to the otherwise positive direction of activity. In the June survey, oil-services contacts expected output to decline 0.2% in the third quarter. The September release did not publish detailed sector growth rates in the press summary, but it again said oil services was the only sector not expecting higher activity ahead.

Capacity constraints and hiring difficulties ease further

The labour-market and capacity indicators moved in a softer direction. Twenty-eight percent of contacts said they were operating at full capacity, down from 30% in the June survey. The share reporting recruitment difficulties fell to 17% from 18%. Norges Bank said both measures are below their historical averages, and contacts expect only weak employment growth through the second half of 2026.

Those readings extend a gradual cooling visible earlier in the year. In March, 32% of contacts reported full capacity utilisation and 21% reported labour shortages. By June, those shares had fallen to 30% and 18%, respectively. The September figures therefore continue the decline rather than marking a sudden shift.

For monetary policy, the direction of these capacity indicators is relevant because Norges Bank assesses how much spare capacity exists in the economy alongside inflation and wage developments. A lower share of firms facing capacity or recruitment constraints can be consistent with less pressure from demand. It does not by itself establish how the central bank will set rates, particularly when inflation remains above target.

The August policy meeting left the policy rate unchanged at 4.25%. At that meeting, Norges Bank said inflation had slowed and had been lower than projected during the summer, but Governor Ida Wolden Bache cautioned that inflation was still too high and that it was too early to conclude that the inflation outlook had changed materially. The bank said another rate increase could still become necessary.

Wage growth stays high even as the labour market cools

Wage expectations in the Regional Network remain elevated relative to Norges Bank’s 2% inflation target. Contacts estimate annual wage growth of 4.5% in 2026, unchanged from the June survey. Their estimate for 2027 slipped to 4.0% from 4.1% previously.

The wage figures sit alongside mixed inflation signals. Statistics Norway reported that the consumer price index was 3.3% higher in August than a year earlier, while CPI adjusted for tax changes and excluding energy products rose 3.0%. Those rates remain above the central bank’s target even though underlying inflation has eased from earlier highs.

The combination of softer capacity indicators and still-high wage expectations leaves Norges Bank with evidence moving in different directions. Businesses are not signalling a collapse in activity, and they continue to see moderate output growth through year-end. At the same time, fewer contacts are constrained by capacity or labour shortages, and employment growth is expected to remain weak.

Profitability does not appear to be providing a new source of acceleration. Norges Bank said overall profitability among Regional Network contacts was broadly unchanged from the third quarter of 2025. That, together with the moderate output outlook, suggests the survey is describing an economy that is still expanding but with less strain on available resources than earlier in the cycle.

The next major test for how Norges Bank interprets these signals comes on September 24, when the Monetary Policy and Financial Stability Committee is scheduled to announce its next policy-rate decision and publish Monetary Policy Report 3/2026.