Handelsbanken Research Reports

Handelsbanken's recent macroeconomic research on Norway highlights slight underperformance in mainland economic activity alongside persistent cooling in the housing sector ahead of Norges Bank's September policy decision. The institution notes that Norway's mainland Q2 GDP expanded by 0.3% quarter-on-quarter, marginally missing Handelsbanken's and consensus forecasts of 0.4% due to temporary disruptions in hospitality, reservoir levels, and vehicle purchases. Despite downward revisions to Q1 growth and softening unit labor cost expansion, steady employment growth of 0.2% indicates that broader economic conditions will not materially alter the central bank's near-term rate outlook. Concurrently, Handelsbanken's preliminary models project a 0.5% seasonally adjusted contraction in August housing prices, continuing a downward trend after July's 1.1% drop and falling short of Norges Bank's projected 0.4% rise. The bank identifies elevated interest rates and landlord divestments in Oslo as key drivers behind the housing market's weakening demand and increasing supply. Ultimately, Handelsbanken concludes that while housing and GDP figures remain secondary to inflation and Regional Network surveys, persistent weakness could support greater central bank caution going forward.