Reports 2018/10

Economic trends for Møre og Romsdal

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The economic outlook in Møre og Romsdal is, like in the nation generally, characterized by the fact that Norway has entered a period of a moderate economic upturn. Many of the driving forces that have been working expansively during the downturn in recent years will have a more neutral or contractual development in the coming years. This is especially pronounced in the monetary and fiscal policy, the companies' cost competitiveness and in housing investments. However, this will not stop the emerging upswing we see, but contributes to moderate it. Growth internationally is expected to increase, and oil investments will again contribute positively to the development of activity. Estimates given in the future indicate that Norway will be in an almost balanced cyclical situation in 2020.

Oil prices have risen since 2015/2016, when it was below USD 30 a barrel, to a level above USD 70 in January this year. Despite a fall in oil prices of USD 65 in February this year, a somewhat higher oil price, improved international economic conditions and lower investment prices will, according to our projections, contribute to increased petroleum investments. The depreciation of the Norwegian krone after the fall of the oil price in 2014 has given positive impetus to the economy. With a somewhat higher oil price, the Norwegian krone is expected to increase somewhat during the period of projection.

With relatively low interest rates and rising real income growth, the increase in household consumption is projected to stay high during the next few years. Investments in the mainland economy will increase and the growth seems to be economically widely based.

After moderate production growth in primary industries last year, small changes in production growth are expected this year. The manufacturing production for the country as a whole is expected to grow this year, and this is also the expectation for the county of Møre og Romsdal, while the production development in construction is still expected to be high. Production in market-based services is expected to rise, and somewhat stronger than last year, while production in public services continue to increase, but more moderate than last year. It is expected growth in total gross product for all industries in the county this year, and somewhat stronger than in 2017. Growth in total gross product is expected to increase clearly also in 2019.

Møre og Romsdal had an increase in total employment in 2017, with increased employment in construction, market-based and public services, while the annual average for employment in manufacturing continued to decline slightly. Estimates show a somewhat stronger employment growth in 2018 than last year, with continued employment growth in construction, market-based and public services. The manufacturing is also expected to grow in employment, albeit moderately.

The employment growth in Møre og Romsdal is expected to remain at about the same level as this year also next year, with an expected increase approximately as estimated for the country as a whole, or slightly lower. A stronger growth is expected in the manufacturing employment, and continued positive development is expected in construction, market-based and public services, as well as in some other industries, including production and services related to the petroleum sector.

Increased ageing and more immigrants in working age contribute, isolated seen, to curbing occupational participation. But after a few years of minor changes in the labor force, the labor participation can again increase somewhat due to increased activity in the economy. We expect the workforce to increase somewhat less than the employment in the current year, so unemployment will slightly decrease.

Preliminary figures for 2017 show continued increase in the population of Møre og Romsdal, though lower than in the previous year. There is still a birth surplus in the population, while overall net migration, including net immigration, still contributes to a slight increase in the population. Net immigration to the county is falling, which is due to lower immigration to Norway, while the rate of emigration from the county, similar to the situation for the nation as a whole, is now lower than in the year before. Preliminary figures for 2017 show that net domestic out-migration remains at about the same level as in the previous year. The growth in the population is expected to continue, but with a somewhat lower net immigration than before. The same is expected for the number of persons in working age, but especially then among those above the age of 50. The projected development of the labor force and employment indicates a decline in unemployment in Møre og Romsdal also in 2019.

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