Electricity supply contributed to investment growth in 2018

Final investments for 2018 within oil and gas, manufacturing, mining and quarrying and electricity supply amounted to NOK 217.4 billion, measured in current value. This is a clear increase of 7.5 per cent compared with final investments for 2017.The growth is mainly due to a strong increase of 27 per cent within electricity supply, but manufacturing and the oil and gas industry also contributed positively. 

The latest estimates for 2019 are also positive, and suggest an overall increase of 8.3 per cent compared with the corresponding figure for 2018. The increase in 2019 is driven by positive investment forecasts within the oil and gas industry, as well as strong investment growth within manufacturing. For more details about investments within the oil and gas industry, please see the following article.

According to seasonally-adjusted figures, quarterly final investments had the following development from the 3rd to the 4th quarter of 2018:

• Oil and gas: 8.3 per cent
• Manufacturing: - 2.3 per cent
• Electricity supply: - 3.9 per cent

New record-high investment level in electricity supply in 2018

Final investments in electricity supply for 2018 amounted to a new record-high level of NOK 40 billion. This strong upturn is equivalent to 27 per cent compared with final investments for 2017. The growth is due to a high investment level in both the production and the distribution sector. The growth in the production sector is due to high investments in wind farm development, while the growth within the distribution sector is related to the installation of new power meters (AMS) and power grid upgrades.

Indications of a minor investment fall in 2019

The latest estimates for electricity supply in 2019 suggest a minor investment fall of 3 per cent compared with the corresponding figure for 2018, given in February last year. The fall is due to a clear decline in the distribution sector of 13 per cent, which can be linked to completion of the installation of the new AMS meters in 2018. The total decline is however dampened by an increase in the production sector. The growth in the production sector is due to the further development of wind farms. 

Clear increase in manufacturing in 2018 - forecasts of further growth in 2019

Final investments within manufacturing amounted to NOK 24.3 billion in 2018. This represents a clear increase of 14 per cent compared with 2017. The overall growth in manufacturing is particularly related to a high investment level within the industry grouping refined petroleum, chemicals and pharmaceuticals and in food products. In addition, higher investments within the industry grouping rubber, plastic and mineral products also contributed positively. In contrast, the overall increase in 2018 was dampened by an investment decline in basic metals. This decline is related to the completion of some major investment projects in 2017.

The most recent forecast for 2019 indicates a significant investment increase of 30 per cent compared with the corresponding figure for 2018. The upturn in manufacturing for 2019 is particularly due to high investment estimates among capital-intensive industries such as basic metals and the industry grouping refined petroleum, chemicals and pharmaceuticals. Moreover, establishments within food products also have high investment forecasts. In addition, some major projects within paper and paper products and repair and installation of machinery also contribute to a positive outlook for manufacturing investment in 2019.

The estimates for manufacturing investment in 2019 have been revised strongly upwards compared with the previous survey conducted in November 2018. This is a normal trend in the forecast cycle, and is partly due to the fact that more establishments now have an investment budget available for 2019. Hence, this suggests that early investment estimates should be interpreted with some caution.

Rise in mining and quarrying in 2018, positive figures also for 2019

Final investments for mining and quarrying in 2018 amounted to NOK 1.3 billion. This represents a significant rise of 121 per cent compared to the year before. The most recent estimate for 2019 also shows an increase compared with the corresponding figure for 2018.