Moderate decline in total investments for 2017

Published:

The companies’ latest investment estimate for both 2017 and 2018 indicate a moderate decrease within oil and gas, manufacturing, mining and quarrying and electricity supply. This is due to lower investments in the oil and gas industry. The overall decline is however dampened by a strong growth within electricity supply.

The latest estimates for 2017 show that total investments are expected to amount to NOK 212 billion, according to new figures from the statistics Investments in oil and gas, manufacturing, mining and electricity supply. This is 2.7 per cent lower than the corresponding figure for 2016, given in the 3rd quarter of 2016. The decline is mainly due to a clear decrease within oil and gas. The overall decline is, however, partly offset by a substantial investment growth in electricity supply.

Figure 1. Estimated investments collected in 3rd quarter same year

Extraction and pipeline transport Manufacturing, mining and quarrying Electricity supply, gas and steam
2007 121129 26906 14279
2008 133400 33244 14153
2009 148061 26481 13268
2010 145644 20540 15058
2011 157766 20907 19015
2012 190681 21244 20898
2013 221795 21202 20902
2014 237056 21646 22181
2015 203736 21254 24137
2016 167588 22988 27213
2017 155627 22310 34034

New figures for 2018 suggest that total investments will amount to NOK 194.3 billion; 2.5 per cent lower than the corresponding figure for 2017. The fall is driven by an expected decline within oil and gas. For more details about investments within the oil and gas industry, please see the following article. Positive investment forecasts for both manufacturing and electricity supply contribute partly to dampen the overall investment decline in 2018.

According to seasonally-adjusted figures, quarterly final investments had following development from the 1st to 2nd quarter of 2017:

  • Oil and gas: 0.6 per cent
  • Manufacturing: -11 per cent
  • Electricity supply: -6 per cent

Figure 2. Final investments per quarter. Seasonally adjusted. 2005=100

Manufacturing Electricity supply, gas and steam Extraction and pipeline transport
Q2-2007 130.2 137.9 123.8
Q3-2007 152.3 139.8 130.4
Q4-2007 151 151.4 129.9
Q1-2008 174.7 169.4 132.9
Q2-2008 180 168.3 130.8
Q3-2008 180.8 162.1 142
Q4-2008 180.7 164.4 150.4
Q1-2009 153.9 155.7 164.9
Q2-2009 124.5 148.7 154.7
Q3-2009 111.6 149.1 148.4
Q4-2009 99.7 147.8 141
Q1-2010 102.1 145.2 137.6
Q2-2010 100.6 164.7 148.4
Q3-2010 89.8 187.1 133.2
Q4-2010 99.4 178.1 144.7
Q1-2011 98.3 197.5 156.3
Q2-2011 99.2 204.1 161.1
Q3-2011 107.9 188.4 176.9
Q4-2011 104.5 214.5 183.4
Q1-2012 111 218.5 188.5
Q2-2012 109.3 206.8 195.9
Q3-2012 98.4 235 194.1
Q4-2012 106.1 245.3 214.9
Q1-2013 99 217 224.4
Q2-2013 112.3 237.7 236.2
Q3-2013 107.4 249.6 253
Q4-2013 104.1 242.5 253.2
Q1-2014 113.2 262.6 255.5
Q2-2014 110.5 277.7 253.6
Q3-2014 111.1 244.4 248.5
Q4-2014 118.7 236.2 237.3
Q1-2015 99.2 264.3 242.5
Q2-2015 104.7 271.9 230.8
Q3-2015 115.8 270.8 215.6
Q4-2015 109.2 291.4 204.3
Q1-2016 125.2 293.7 191.1
Q2-2016 126.1 290.4 182.7
Q3-2016 123.5 324.7 177.9
Q4-2016 129.3 326.5 172.6
Q1-2017 122.8 334.4 169.8
Q2-2017 109.3 314.3 170.9

Strong investment growth in electricity supply in 2017, positive forecasts also for 2018

New estimates for 2017 show that total investments within electricity supply are expected to amount to NOK 34 billion; 25 per cent higher than the corresponding figure for 2016. The substantial growth is due to a high investment level in both the distribution and the production sector. The increase in the distribution sector is related to power grid upgrades, as well as installation of new automatic electricity meters (AMR). The installation of the new meters carries out in the period 2016-2018, while a large part of these investments will be finalized during 2017. For the production sector, the increase is attributed to the development of several new wind farms. Implementation of new depreciation rules combined with the fact that the application deadline for electricity certifications is approaching, may explain this development.

Preliminary estimates for 2018 indicate a further investment growth within electricity supply. The estimate for 2018 is 12 per cent higher than the corresponding figure for 2017. The largest contribution to the growth comes from a high level of investments within production of electricity, but investments in transmission and distribution of electricity are also expected to increase in 2018.

Figure 3. Investments. Electricity supply, gas and steam. Estimates given on different points in time

2015 2016 2017 2018
May t-1 24698 27533 30402 34355
Aug t-1 24227 26328 30938 34567
Nov t-1 24588 26630 31616
Feb t 25322 28100 33977
May t 24783 27345 34780
Aug t 24137 27213 34034
Nov t 23597 27123
Feb t+1 23114 26222

Minor decrease in manufacturing investments in 2017

Manufacturing investments for 2017 are now estimated at NOK 21.7 billion- measured in current value. The estimate is 2.6 per cent lower than the corresponding figure for 2016. The overall investment decline in manufacturing is mainly due to a decrease within the industry grouping refined petroleum, chemicals and pharmaceutical products. In addition, lower investments in basic metals also contribute negatively. The decline in these industries is partly related to the fact that some major investment projects, which contributed to growth in 2016, have now been completed. On the other hand, the overall decline in 2017 is somewhat dampened by high investments in rubber, plastic and mineral products, and in food products. Within food products, the investment growth can be related particularly to processing and preserving of fish.

Figure 4. Investments. Manufacturing, mining and quarrying. Estimates given on different points in time

2015 2016 2017 2018
May t-1 13426 18828 17014 17914
Aug t-1 15053 20002 16187 18006
Nov t-1 18667 21762 18574
Feb t 21255 22388 21618
May t 20684 23204 22616
Aug t 21254 22988 22310
Nov t 20970 22518
Feb t+1 20603 23789

Figure 5. Contribution by industry for rate of change in manufacturing 2017/2016. Estimates collected in Q3 same year

Contribution by ind. Percentage change
Furniture and manufacturing n.e.c. 0.3
Repair, installation of machinery 0.0
Transport equipment n.e.c -0.3
Ships, boats and oil platforms 0.7
Machinery and equipment 0.2
Computer and electrical equipment 0.7
Fabricated metal products 0.1
Basic metals -2.1
Rubber, plastic and mineral prod. 1.7
Refined petro., chemicals, pharmac. -5.2
Printing, reproduction 0.2
Paper and paper products 0.7
Wood and wood products -0.7
Textiles, wearing apparel, leather 0.0
Food, beverages and tobacco 1.2
Manufacturing -2.6
¹ The contribution by industry is calculated by multiplying the percentage change of the industry with the industry's share of manufacturing.

Significant growth in export-related manufacturing in 2018

The latest estimates for 2018 indicate a substantial increase in manufacturing investments; 11 per cent higher compared with the corresponding figure for 2017. The expected growth in 2018 is due to a high level of investments in the industry grouping refined petroleum, chemicals and pharmaceuticals as well as in food products. The investment level within these two industries is expected to rise by 40 and 27 per cent respectively. As in 2017, the growth in food products is related to a high investment level within processing and preserving of fish. On the other hand, the overall increase in 2018 is dampened by a lower investment level within basic metals. However, early estimates for next year can be somewhat uncertain and should be interpreted with caution.

Figure 6. Contribution by industry for rate of change in manufacturing 2018/2017.¹ Estimates collected in Q3 the previous year

Contribution by ind. Percentage change
Furniture and manufacturing n.e.c. 0.5
Repair, installation of machinery -0.1
Transport equipment n.e.c -0.1
Ships, boats and oil platforms 0.2
Machinery and equipment 0.8
Computer and electrical equipment -0.1
Fabricated metal products 0.1
Basic metals -6.2
Rubber, plastic and mineral prod. 2.7
Refined petro., chemicals, pharmac. 8.2
Printing, reproduction -0.8
Paper and paper products 0.0
Wood and wood products 0.8
Textiles, wearing apparel, leather -0.1
Food, beverages and tobacco 4.9
Manufacturing 10.9
¹ The contribution by industry is calculated by multiplying the percentage change of the industry with the industry's share of manufacturing.

Clear fall in mining and quarrying in 2017, strong growth in 2018

Measured in current value, the estimates for investments in mining and quarrying in 2017 are expected to amount to NOK 584 million. This represents a clear decline of 15 per cent compared to the year before. The estimates for 2018 suggest a strong rise of 21 per cent.