Growth in total investments in 2018 due to wind farm development

The investment survey conducted in August 2018 suggest that total investments within oil and gas, manufacturing, mining and quarrying and electricity supply in 2018 will amount to NOK 224 billion. This is 5.7 per cent higher than the corresponding figure for 2017, given in August last year. The increase is particularly due to a strong investment growth within electricity supply, which is related to development of several new wind farms. In addition, manufacturing investments are also contributing positively, while investments within the oil and gas industry are more or less unchanged.

The companies’ newest estimates for 2019 are adjusted upwards by 7 per cent compared to the previous survey conducted in May 2018. Total investments are now expected to amount to almost NOK 226 billion; a significant increase of 16 per cent compared to corresponding figure for 2018, given in August last year. All of the industries have positive forecasts for 2019, but the total growth is mainly driven by higher estimates within the oil and gas industry. 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 first to the second quarter of 2018:

• Oil and gas: 3.5 %
• Manufacturing : 10.1 %
• Electricity supply: 10.9 %

High investments in wind farm development

The companies’ latest investment estimates for 2018 suggest that total investments within electricity supply will amount to NOK 41.7 billion. This is 23 per cent higher than the corresponding figure for 2017. The growth is particularly due to a high investment level within the production sector. High investments related to development of several new wind farm explains this development. In addition, the distribution sector is also seeing an investment increase compared to 2017. This increase is connected to installation of new power meters (AMS) and power grid upgrades.

The newest estimates for 2019 are adjusted upwards with 11 per cent compared to the previous survey conducted in May 2018. Total investments in electricity supply are now expected to amount to NOK 38.1 billion; 10 per cent higher than the corresponding figure for 2018, given in August last year. The production sector is expected to increase by 50 per cent due to further investments in wind farm development. The total investment increase in electricity supply is however dampened by lower investments in the distribution sector. This decline is linked to the completion of the installation of the new AMS- meters in 2018.

Increase in manufacturing in 2018, further growth in 2019

Latest investment estimates for manufacturing in 2018 indicate a strong growth of 13 per cent compared to the corresponding figure for 2017. The growth in 2018 is particularly due to a high investment level within the industry grouping refined petroleum, chemicals and pharmaceutical products. Maintenance work and upgrade of production plants among several key producers explains this development. In addition, higher investments within food products and rubber, plastic and mineral products also contribute positively. The overall increase in 2018 is dampened by a lower investment level within basic metals. The decline is related to the fact that some major investment projects, which contributed to growth in 2017, are either completed or in a final phase.

The companies’ newest forecasts for 2019 indicate a significant investment increase of 24 per cent compared with the corresponding figure for 2018. The growth is mainly due to high investments in the industry grouping refined petroleum, chemicals and pharmaceutical products and in food products. The investment level within these two industries is expected to rise with 41 and 33 per cent respectively. In addition, some major projects within paper and paper products, and repair and installation of machinery also contribute positively to the overall increase in manufacturing.

Strong growth in mining and quarrying in 2018

Measured in current value, the estimates for investments in mining and quarrying in 2018 are expected to amount to almost NOK 1.4 billion. This represents a strong growth of 132 per cent compared to the year before. Preliminary estimates also suggest an increase in 2019 compared to the corresponding figure for 2018.