Our comprehensive assessment of Norway's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Norway, as well as the latest industry developments that could impact Norway's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Norway before your competitors.
Norway Country Risk
We continue to expect a slowdown in oil sector investment and an uncompetitive export sector to weigh on Norwegian GDP growth.
The residential housing market has been a major contributor to overall real GDP growth for most of the past decade, but is set to cool over the next few years. While we have not yet seen signs of a full-blown housing crash, we will be vigilant for signs of a significant correction in the coming quarters.
We believe that the Conservative-Progress minority coalition government is unlikely to agitate for major changes in policy in the new future.
Key Forecast Changes
Our 2014 and 2015 real GDP growth forecasts have been revised down to 1.8% and 1.9%, respectively, from 1.9% and 2.0% previously. These changes are due...
Norway Industry Coverage (8)
BMI maintains a modest view on the Norwegian autos market. Growth is expected to come from the dominant passenger car segment, with electric vehicle subsidies and strong private consumption growth buoying the market. However, the commercial vehicle segment is expected to remain in negative growth during 2014, due to low government spending on infrastructure and the uncompetitive manufacturing sector.
Current electric vehicle (EV) subsidies in Norway will be revised in 2015; sooner than the government originally planned. The faster than expected uptake in EV sales created by the policy has called into question its sustainability and we believe we will see subsidies and incentives reduced in 2015.
Food & Drink
Norway Food & Drink
BMI View: Â The Nordics consumer outlook remains gloomy as the regional economies are expected to feel the negative effects of the slowdown in the eurozone. In 2014 and 2015 real GDP (year-on-year) growth in each country is not expected to exce ed 2.8 %. Heavy household debt load will continue to curb private consumption in Denmark and Norway, while Sweden and Finland will suffer from relatively high and sticky unemployment levels.
Food consumption (local currency) growth year-on-year (y-o-y) in 2014: +4.0%; compound annual growth rate (CAGR) 2013-2018: +4.9%
BMI View: Â Norway's construction sector proved slightly more robust than expected in 2014, with growth of construction industry value remaining in positive territory at 1.2%. This is a significant decline on growth seen in previous years, reflecting an overall deceleration in Norway's domestic economy caused by an uncompetitive export sector. Construction industry value is expected to pick up in 2015, with growth of 2.71% and improve slightly throughout the remainder of our forecast period to hover at around 3.4% per year.
Key Trends and Developments
Despite a slow-down in investments in the oil sector, opportunities remain in utilities, particularly the renewables market. SkanskaÂ recently signed a NOK409mn (USD63.47mn) contract to build the 192GHh Rosten hydropower plant in Sel municipality, Gudbrandsdalen;...
Norway Medical Devices
BMI Industry View : The Norweg ian medical device market is limited by the size of the population , but enjoys above average per capi ta spendi ng of US$294 . The market is projected to grow at a US dollar CAGR of 3.1 % to 2018 with the ageing population the main growth driver. The market will continue to be import-led with much of domes tic production geared to the export market.
Headline Industry Forecasts
In 2013, the medical device market...
Oil & Gas
Norway Oil & Gas
BMI View: Norwegian oil is on track to return to growth in 2014 after 12 consecutive years of decline. Both oil and gas production will remain steady in 2015 despite lower oil prices, though investment in Norway's upstream will fall. This is expected to impact longer-term oil production with less investment in IOR projects and frontier development.
Pharmaceuticals & Healthcare
Norway Pharmaceuticals & Healthcare
BMI View: Despite the forecasted decline in the burden of disease in Norway over the next two decades, the anticipated growth of Norway's ageing population is to have an unprecedented impact on the demand for healthcare. The elderly require more medical check-ups and care than young people as a result of the increased prevalence of chronic disease with age. They therefore consume a disproportionately large share of healthcare services. Such robust demand for services over the coming years means that the government will need to adapt strategies and cost efficiency to deal with increasing healthcare costs.
Headline Expenditure Projections
Pharmaceuticals: NOK19.90bn (USD3.36bn) in 2013 to NOK20.26bn in 2014; 1.82% in local currency terms.
Healthcare: NOK273.15bn (USD46.17bn) in...
Statkraft, the country's largest power producer has allocated NOK12bn (USD1.81bn) to upgrade Norwegian and Swedish hydropower plants from 2014 to 2018. Also, the country's fifth largest utility, BKK Produksjon has started to upgrade its hydro production facilities. BKK aims to upgrade its Matre plant to almost double the capacity of its existing plant by 2016, from 96MW to 180MW.
Norway plans to two build subsea power cables connecting Norway to the UK and Germany, both with transmission capacities of 1.4GW. The North Connect, a high-voltage direct current (HVDC) power link runs from Sima and Samnanger in Norway to Peterhead in Scotland. The interconnector is currently undergoing permitting process, with the partners obtaining an agreement for the cable landing site at Simadalen in July 2014. The North Connect cable is expected to...
BMI View: Â The Norwegian telecommunications market faces a change of dynamics following the exit of Tele2, one of the largest operators in July 2014, albeit the deal is still pending regulatory approval. This is set to bring about redistribution of market shares. The country's second largest operator TeliaSonera will boost its market share having acquired Tele2 assets, while newcomer Access Industries is poised to erode the market share of both incumbent Telenor and TeliaSonera having secured necessary bandwidth and financing to increase its presence in Norwegian market. In the first quarter following the acquisition of Tele2, there has been no notic e able redistribution of market shares.
Data released by the principal operators suggest the market grew by 12,000 subscriptions in...