Moderate investment decline projected for 2018

The first estimates for 2018 show that total investments are expected to amount to NOK 196.2 billion. This is 3 per cent lower than the corresponding figure for 2017, given in the 2nd quarter of 2016. The decline is mainly due to a decrease within oil and gas. The decrease is, however, partly offset by higher investments in electricity supply and manufacturing.

The latest estimates for 2017 show that total investments are expected to amount to NOK 211.8 billion – 3.9 per cent lower than the corresponding figure for 2016. The decrease now shown is clearly smaller than in the previous survey, which indicated a decline of 7.8 per cent from 2016 to 2017. The decline is due to a fall within oil and gas. Manufacturing is at about the same level as in the previous survey, while further investment growth in electricity supply dampens the overall decline.

According to seasonally-adjusted figures, oil and gas fell by 2.1 per cent in quarterly final investments from the 4th quarter of 2016 to the 1st quarter of 2017. In the same period, manufacturing had a quarterly decrease of 2.9 per cent, while electricity supply increased by 3.6 per cent.

First estimates for 2018 indicate a decrease in oil and gas investments

The investments in oil and gas extraction and pipeline transport for 2018 are estimated at NOK 144 billion. This is 7.1 per cent lower than the corresponding estimate for 2017 given in the 2nd quarter of 2016. The decrease is due to lower investments within the categories fields on stream, onshore activity and shutdown and removal.

Applications for plans for development and operation (PDO) are expected to be submitted to the authorities for several development projects in late 2017. The largest of these are Johan Castberg, Snorre Expansion, Pil & Bue and Snadd. In addition, Skarfjell is expected to be delivered within February next year and Johan Sverdrup Phase 2 during the second half of 2018. In accordance with the delimitation of the statistics, all of these projects will be included in the survey when and if the PDO applications are delivered to the authorities. If the schedules for these plans are realised, the accumulated investment costs in 2018 from these projects will be substantial. If so, the fall in investments in 2018, indicated in the present survey, might be dampened significantly, all other things being equal.

Increased oil and gas estimates for 2017

The investments in oil and gas extraction and pipeline transport for 2017 are estimated at NOK 154.4 billion. This is 3.3 per cent higher than the previous estimate for 2017. The increase is mainly due to higher estimates for exploration and concept studies and field development.

The estimate for 2017 is 9.1 per cent lower than the corresponding estimate for 2016, given in the 2nd quarter of 2016. The decrease indicated in the present survey is significantly lower than the 13 per cent decrease indicated in the previous survey. In addition to the present increase for 2017, the lower relative decrease is also due to a moderate decrease in the estimate for 2016, given in the 2nd quarter of 2016, as shown in figure 3 above.

The decrease is due to lower investments in fields on stream, onshore activity and shutdown and removal.

Investment growth in electricity supply in 2017 and 2018

New estimates for 2017 show that total investments in electricity supply are expected to amount to NOK 34.8 billion – measured in current value. The estimate is 27 per cent above the corresponding figure for 2016. The largest contribution to the growth comes from a high level of investments within transmission and distribution of electricity. The increase is related to the upgrading of power grids and installation of new automatic electricity meters (AMR). In addition, investments in production of electricity are also seeing a strong increase, which is partly attributed to the development of several wind farm projects. Implementation of new depreciation rules combined with the fact that the application deadline for electricity certifications is approaching, may explain this development. For further information, see the article "Kraftinvesteringer i støtet" (only available in Norwegian).

The first estimates for 2018 indicate further growth in investments in electricity supply. The estimate for 2018 is 13 per cent above the corresponding figure for 2017, published at the same time last year. The growth is particularly related to an investment rise in production of electricity, but investments in transmission and distribution of electricity are also expected to increase in 2018.

Export-oriented industries contribute to investment decline in manufacturing in 2017

Manufacturing investments for 2017 are now estimated at NOK 22.0 billion –measured in current value. The 2017 estimate is 2.2 per cent lower than the estimate for 2016 given in the 2nd quarter of last year. There are however some differences between the various manufacturing industries. It is especially export-oriented industries such as refined petroleum, chemicals and pharmaceuticals and basic metals that are behind the investment decline in manufacturing. 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. Wood and wood products also contributed to the investment decline.

Manufacturing industries that dampen the decline include food and food products, fabricated metal products, and rubber, plastic, and mineral products. Within food and food products, the investment growth can be related to producers processing and preserving fish.

¹ The contribution by industry is calculated by multiplying the percentage change of the industry with the industry's share of manufacturing.

Positive forecasts for manufacturing in 2018

The first estimate for manufacturing for 2018 suggests a growth in investments. Compared with the corresponding estimate for 2017, manufacturing investments are likely to increase 5 per cent. The expected growth in 2018 is due to a high level of investments in the industry grouping refined petroleum, chemicals and pharmaceuticals, which are expected to rise 27 per cent compared with 2017. The industries rubber, plastic and mineral products and food and food products also contribute to the growth. Manufacturing industries that dampen growth include basic metals, wood and wood products, as well as computer and electrical equipment. It is important to point out that early estimates for next year can often be somewhat uncertain.

¹ The contribution by industry is calculated by multiplying the percentage change of the industry with the industry's share of manufacturing.

Fall in mining and quarrying in 2017, growth in 2018

Measured in current value, the estimates for investments in mining and quarrying in 2017 are expected to amount to NOK 583 million. This represents a decline of 14 per cent compared to the year before. The estimates for 2018 suggest a rise of 21 per cent.

• More tables and numbers about Investments in oil and gas, manufacturing, mining and electricity supply