NORWAY: Q4 RNS Dovish On Net, But Oil Services Role May Temper Mkt Reaction

Overall, the Q4 Regional Network Survey (RNS) should have a net dovish impact on Norges Bank’s December MPR rate path. This is being reflected in NOK rates markets, with the Sep26 – Dec26 FRA contract down 4bps on the session. Bloomberg’s MIPR function suggests there are around 30bps of easing priced over the next year. The dovish reaction may be being tempered a little by the outsized role oil services played in downward revisions for many components. 

• Norges Bank’s September rate path was consistent with one rate cut in each of the next three years, but recent developments suggest this outlook may be a little too hawkish. That said, we aren’t expecting material revisions, with the December path unlikely to endorse more than 2x25bp cuts next year.
• The capacity utilisation components of the RNS are the most important parts of the survey, in our view. The proportion of firms citing labour as a constraint on output fell to 22%, the lowest since Q1 2024 and 3pp below last quarter’s reading. The share of firms reporting problems accommodating an increase in demand also fell to 33% (vs 35% prior).
• One offsetting detail is that oil services (alongside the rate-sensitive construction sector) saw the largest downward revisions. The retail saw notable increases in capacity utilisation.
• Although there was a one-tenth upward revision to 2026 wage growth expectations, the 4.1% reading remains below Norges Bank’s 4.2% projection.
• On the output side, current quarter output of 0.4% Q/Q is in line with Norges Bank projections, while next quarter’s output is seen at 0.3% Q/Q. Downward output revisions were seen in oil services, manufacturing and construction, offset by upward revisions/steady growth in retail trade and services.
• Employment expectations were revised down to 0.1% Q/Q in the current and following quarter. Sectoral changes were consistent with the output responses.
• Investment expectations provided a more positive growth signal. For 2026 (3.3% Y/Y vs 1.6% in the Q3 survey), this was driven by the services and manufacturing sectors.