Investments in electricity supply are falling

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Companies’ latest investment estimates for 2021 within oil and gas, manufacturing, mining and quarrying and electricity supply give indications of a slight decline in 2021. Lower total investment is also indicated for the next year 2022. For both years, it is electricity supply that contributes most to the decline.

Written by: Edvard Andreassen

The investment survey conducted in May within oil and gas, manufacturing, mining and quarrying and electricity supply in 2021 amounted to NOK 243 billion. This is 1.4 per cent lower than the corresponding figure for 2020. The fall can mainly be attributed to a clear decline in investments within electricity supply. Manufacturing investments are roughly unchanged, while investments in oil and gas activities contribute positively with a marginal increase of 0.9 per cent compared with the corresponding figures for 2020. For more details about investments within the oil and gas industry, please see the following article.

Companies’ latest total investment estimates for 2022 indicate a decline of 2.5 per cent compared with the corresponding figures of 2021.The decrease in 2022 is driven by a sharp fall in investment within electricity supply. Investments in oil and gas activities also contribute in a negative direction. Higher investment in manufacturing is helping to curb the overall decline.

The overall estimates for 2021 have been adjusted upwards compared with the previous survey, while the investment estimates for electricity supply have been adjusted downwards. The adjustments in the overall estimates should be seen in connection with an improvement in the corona situation and the higher oil price.

Figure 1. Estimated investments collected in 2nd quarter same year

Extraction and pipeline transport Manufacturing, mining and quarrying Electricity supply, gas and steam
2011 150104 19823 18735
2012 191543 20993 21696
2013 219668 20527 20681
2014 241387 21474 22495
2015 200262 20684 24783
2016 169896 23204 27345
2017 154381 22616 34780
2018 156454 25111 40032
2019 183738 33439 41684
2020 180296 27528 38877
2021 181854 27665 33841

According to seasonally-adjusted figures, quarterly final investments had following development from the 4th quarter of 2020 to the 1st quarter of 2021:

  • Oil and gas: 0.7 %
  • Manufacturing : 6.7 %
  • Electricity supply: -6,4 %

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

Manufacturing Electricity supply, gas and steam Extraction and pipeline transport
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 100.6 223.2 224.4
Q2-2013 110.7 234.7 235.9
Q3-2013 108 245 253.3
Q4-2013 103.5 253 253.1
Q1-2014 111.7 258.7 255.4
Q2-2014 112.3 275.8 253.3
Q3-2014 112.1 246.2 249.1
Q4-2014 117.8 248.5 237.1
Q1-2015 100.2 263.3 242.8
Q2-2015 103.9 269.4 230
Q3-2015 116.9 265.5 216.6
Q4-2015 108.4 288.6 203.5
Q1-2016 127.5 309.3 192
Q2-2016 123.8 287.1 186.9
Q3-2016 124.4 313.2 179.1
Q4-2016 129 323.5 171
Q1-2017 121.1 369.7 171
Q2-2017 110.3 313.4 170.4
Q3-2017 110.7 415.1 152.5
Q4-2017 123.1 376.1 165.3
Q1-2018 121.3 424.1 154.3
Q2-2018 133.7 473.4 161.8
Q3-2018 134 489.2 170.7
Q4-2018 137.7 479.5 183.2
Q1-2019 159 430.6 183.6
Q2-2019 164.1 444.2 192.4
Q3-2019 184.9 476.5 199.8
Q4-2019 170.9 475.1 209.1
Q1-2020 160.7 433 213
Q2-2020 138.2 510.9 195.1
Q3-2020 142 463.9 189.7
Q4-2020 139.8 417.8 198
Q1-2021 149.2 391 199.3

The seasonal adjustment routine has been adjusted during the Corona-crisis

Thursday the 12th of March 2020 the Norwegian government introduced actions against the spreading of the Corona-virus in Norway. This has led to a change in the investment pattern compared to what we usually observe. Hence, the seasonal adjustment routine during the Corona- crisis is done in such a way that the figures during the crisis (the 1st quarter), are not included in the basis for the calculation of the seasonal pattern. Technically, in the seasonal adjustment routine this is done by specifying the 1st quarter as an outlier.

This means that the usual trend will not be calculated and instead will be trend and seasonally adjusted follow each other. An important exception is the last observation, where the trend figure calculated in the seasonal adjustment routine will only be a projected value and the last observation is not included. The trend figure from the 1st quarter of 2020 and later, is therefore difficult to interpret.

The seasonal adjustment routine of Statics Norway is in line with the recommendations of Eurostat.