The regional network was primarily established to provide up-to-date information about the economic situation and the outlook ahead through direct contact with enterprises. Regular communication with local contacts in Norway's business sector provides us with earlier and more frequent information than available official statistics can supply. The regional network also provides supplementary information about areas not covered by other statistical sources, and is a forum for exploring views on current issues. This article describes the organisation of the network and the kind of information collected from it. In the last section, information from the regional network is compared with official statistics. The network seems to be providing accurate and early signals about developments in key economic variables such as output, employment and investment.
Norges Bank is responsible for the conduct of monetary policy in Norway. Monitoring cyclical developments and making projections for the domestic and the global economy provide important background data for Norges Bank's monetary policy decisions. The decisions are made on an uncertain basis. Uncertainty applies not only to the impact of monetary policy and the outlook for the economy, but also to the current economic situation. Official statistics and information are important sources for the bank's analyses and projections. Some statistics, however, are only published once or a few times a year. In addition, these statistics are often revised, so the final figures might only be available several years later. In order to reduce uncertainty, it is important to obtain as much and as accurate information as possible about the state of the economy and economic developments.
Norges Bank's regional network was established in autumn 2002 to strengthen the Bank's analytical base through direct dialogue with firms concerning their financial situation. Regular talks with local contacts from Norwegian business and community life provide Norges Bank with information earlier and more often than official statistics, adding to our knowledge of the actual state of the economy. The regional network also provides regular, supplementary information about areas not covered by other statistical sources, and through the talks with our network contacts, we also learn which issues are of particular current concern to enterprises. In addition, the regional network allows us to obtain information about the impact of particular events, or to examine other current issues, such as which factors have a decisive impact on enterprises' price-setting. The information obtained from the regional network, combined with other available information about economic developments, forms an important part of the basis for Norges Bank's projections for developments in the Norwegian economy, as for instance presented in Norges Bank's Inflation Report.
Norges Bank's regional network draws on other countries' experience. Central banks in many countries have various forms of regional network The Federal Reserve has established an extensive network of contacts all over the US. On the basis of regular talks with the contacts, eight reports about economic developments are written every year by each of the twelve regional Federal Reserve banks. The national summary of these reports is published in the "Beige Book". Central banks in the UK, Canada and Australia have their own agents employed at regional offices to conduct regular talks with contacts from business and community life. In New Zealand, central bank staff visit the regions to obtain information as part of the preparations for each inflation report. Norges Bank has delegated responsibility for the network to regional research institutions for all the regions except Region East.
Norges Bank has divided Norway into seven regions: Region North (Finnmark, Troms, Nordland), Region Central Norway (Nord-Trondelag and Sor-Trondelag), Region North-West (More og Romsdal and Sogn og Fjordane), Region South-West (Hordaland and Rogaland), Region South (Aust-Agder, Vest-Agder, Telemark, Vestfold), Region Inland (Hedmark and Oppland) og Region East (Oslo, Akershus, Ostfold and Buskerud).
We have engaged the following regional institutions to be responsible for the network in six of the regions:
* Kunnskapsparken Bodo (Region North)
* The Centre for Economic Research at the Norwegian University of Science and Technology (Region Central Norway)
* Moreforsking, Molde (Region North-West)
* Rogalandsforskning (Region South-West)
* Agderforskning (Region South)
* Ostlandsforskning (Region Inland)
The last region, Region East, is covered by Norges Bank.
Five contact rounds are conducted in the course of a year. In each region, meetings are held with about 40 contacts in each round, giving a total of 280 contact meetings. There are currently about 1300 contacts in the network, and each contact takes part in meetings once or twice a year. Since there will always be some contacts who withdraw from the network, ongoing recruitment of new contacts is necessary.
The enterprises in the network have been selected to reflect the production side of the economy, in terms of both industry and geographical area. The agents select companies in the manufacturing and construction industries, services and retail trade according to each sector's share of GDE We also include...