Preliminary national accounts indicate that mainland Norway’s economy experienced a growth of 1.8 percent between 2024 and 2025, when adjusted for constant prices. This uptick is largely attributed to robust performance across various sectors, including those related to oil and gas extraction, tourism, trade, power supply, and aquaculture.
However, it’s important to note that the gross product within the oil and gas sector experienced a slight decline of 0.7 percent last year. When including oil operations, the overall economy exhibited growth of just 1.1 percent, as highlighted in a recent newsletter from the Forecasting Center.
Meanwhile, construction activities have faced ongoing challenges, with a reported decrease of 2.1 percent in gross product from 2024 to 2025—the third consecutive year of decline. Statistics Norway’s production index for construction reveals an alarming overall decline of 6.1 percent from 2022 to 2025, primarily driven by a staggering 12.6 percent drop in building construction, despite a relatively stable overall construction activity during that timeframe.
On a more positive note, household consumption surged by an impressive 2.7 percent from 2024 to 2025, marking a notable increase compared to the previous two years. Business investments in mainland Norway also saw a rise of 1.9 percent, while combined consumption and investments by the state and municipalities grew by an estimated 1.2 percent in 2025. However, net exports faced a slight downturn of 0.2 percent.
Norwegian Economy
Inflation Increase in January
- The consumer price index (CPI) noted a rise of 3.6 percent from January 2025 to January 2026, with a twelve-month growth increase of 0.4 percentage points since December 2025.
- Core inflation reached 3.4 percent in January, marking a 0.2 percentage point increase from December.
- Significant contributors to inflation were surges in housing rents, car prices, and electricity costs. Meanwhile, the twelve-month growth in food and beverage prices relaxed to 4.2 percent in January, which is notably 1.1 percentage points lower than the previous month.
- Economists are increasingly worried that such strong price growth could hinder prospects for an interest rate cut this year.
- The Technical Calculation Committee anticipates a price increase of 3 percent for 2025, which is roughly half a percentage point above the latest estimates from both Statistics Norway and Norges Bank.
Unemployment Rises in 2025
- According to annual figures from Statistics Norway’s Labor Force Survey, unemployment climbed from 4.0 percent in 2024 to 4.5 percent in 2025.
- This uptick in unemployment occurred mainly in the first half of the year, driven by an influx of young individuals aged 15-24 entering the job market.
Construction, Facilities, and Property
- The number of completed homes in 2025 fell to 19,498, down from 24,032 in 2024—a decline reminiscent of post-financial crisis levels from 2010.
- Statistics Norway’s Building Area Statistics reveal that 1,379 start-up permits for housing were issued in January, representing an 11 percent decrease compared to January 2025.
- Conversely, start-up permits for new commercial buildings soared, with 409,351 square meters registered in January—a remarkable 29 percent increase from the same month last year.
- The construction cost index (BKI) for housing spiked 4.6 percent in January, compared to the same month in 2025.
- Delving deeper into specific categories of construction, BKI rose by 4.1 percent for single-family houses and by 5.5 percent for apartment blocks during this period.
- Material costs for detached homes and apartment buildings also took a hike, with twelve-month growth rates of 4.8 and 4.3 percent, respectively, in January.
International Economy
- In the U.S., the economy created a net total of 130,000 new non-agricultural jobs in January, surpassing the anticipated increase of 70,000, while unemployment edged down slightly to 4.3 percent.
- Price inflation in the U.S. registered at 2.4 percent for January, reflecting a decrease of 0.3 percentage points from the previous month.
- Core inflation, which excludes volatile food and energy prices, reached 2.5 percent—matching market expectations and marking the lowest level since March 2021.
(SOURCE: The Forecast Center)