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Saturday, May 18, 2024

Consumption declines again

Ola and Kari Nordmann, the Norwegian equivalents of the typical John and Jane Doe, haven’t been willing to spend much of their money lately. Statistics released just before the Easter holidays show that private consumption fell for the second month in a row during March. Some analysts are blaming the long, cold winter.

Many Norwegians, it seems, simply stayed home instead of going shopping. Retail sales declined 0.2 percent, while other forms of trade (varekonsumet) dropped 0.5 percent, according to state statistics bureau SSB.

The varekonsumet measures household consumption, including electricity, fuel and sales of new vehicles. The figures were weaker than both analysts and the commodities markets had expected, reports newspaper Dagens Næringsliv (DN).

“It can be we’re seeing the effect of the cold winter,” senior analyst Katrine Boye of Nordea Markets told DN. Maybe people didn’t venture out for shopping, or perhaps they fear interest rate hikes and are simply curbing their expenditures.

Boye and some of her colleagues say the numbers indicate lower consumption growth than even Norway’s central bank had expected. It recently decided against raising interest rates, because economic growth was sluggish.

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