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The Norwegian Economy

The Norwegian Economy

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The Norwegian Economy

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  1. The Norwegian Economy By Aslak Molvær, NHO photo: Svein petteraagardInnovation Norway

  2. Norway – facts and figures • Population: 5 million • Pop. Growth: 1.3 percent (2011) • GDP per capita (PPP): USD 54,200 • Unemployment: 3.1 percent (Q3 2012) photo: Johan Wildhagen-www.visitnorway

  3. The Norwegian mixed market economy • A free market, but with substantial government ownership and activity • Part of the European Economic Area (EEA), except with regards to fish and agriculture • Tripartism State, political authorities Employers Employees photo: Wikimedia

  4. The Norwegian economy of today • The EEA Agreement • Floatingcurrency and inflationtargeting • Managing the oil income: The Fiscal Rule • But:- Growing public sector- Lack of investments in R&D and infrastructure- High level of taxation- Low performance in the education system- Lack of labour in the long run Photo: Norwegian Design Council

  5. Norway – an open economy • Total exports of goods and services: NOK 1141 billion; 42.1 percent of GDP (2011) • Major exports: oil and natural gas, fish and other seafood, heavy machinery, metal, chemical products • Major export markets (2011): EU (84 pct), North America (8 pct), Asia (6.5 pct). photo: Heidi Widerø/www.visitnorway

  6. Competitive Norwegian industrial clusters New oppurtunities! Growth in the North SEA FOODFishing, fish farming, equipment HYDRO ELECTRIC POWER Equipment, power generation power distribution, metallurgical industries, fertiliser production MARITIME INDUSTRIESShipyards, ship’s gear, offshore, shipping services, maritime R&D PETROLEUM INDUSTRIES Oil and gas companies, offshore industry, offshore service, shipping, petrochemical industries FOREST INDUSTRIES Saw mills, wood products, chemical wood pulp, paper industry, special products

  7. Norway – a petroleum economy Dutch Disease? Norway – a petroleum economy • Increasedpublicsector • Decreasedproductivity • Crowding out of private industry? • 1963: Phillips Petroleum knocks on the door • 1969: Oil is found in the Norwegian sector • White paper in 1974: How to manage the oil income? • NORSOK standards, focus on ripple effects for the rest of the economy photo:Statoil

  8. From muscles to brainpower – from shipbuilding to 250,000 jobs in oil & gas 1970’ies 40 years later Floatertechnology Concretetechnology Arcticsolutions Reservoirtechnology LNG storage and regas Automateddrilling Onshore and offshore gas processing Subseasolutions Electro, instrumentation

  9. Investments in the petroleum sector 2000 – 2011. Projections for 2012 and 2013. NOK million, current prices. Source: Statistisk sentralbyrå

  10. The Norwegian Oil Sector Supply Industry- Turnover in Subsidiaries and Export Turnover in subsidiaries Export Billion NOK

  11. Norwegian hourly wage costs compared to trading partnersTrading partners = 100 Source: TBU/NHO Hourly wage cost for manufacturing workers in Norway compared to European trading partners (trade-weighted average, trading partners = 100). Estimates for 2012 are based upon the Revised budget 2012 and the Norwegian Krone exchange rate up to and including August 2012. For the remaining of 2012, the exchange rate is assumed to be equal the monthly average for August.

  12. Total Norwegian exports by industryBefore and after the petroleum industry photo: Innovation Norway/Heidi Widerø

  13. The Government Pension Fund - Global

  14. The Norwegian economy is growing fast Kilde: Consensus Forecasts, December 12

  15. Economic growth in EU-27Real GDP Growth. Unweighted and weighted after share of Norwegian exports Source: European Commission / NHO

  16. The dual economy Sectors which are hardly affected by the euro crisis – or not at all Sectors more severely affected by the euro crisis • Traditionalmanufacturing • Touristindustry (partly) • SMEs (problems with financing) • The publicsector • Domestic private consumption • The petroleum sector and some other industries (e.g. fish) photo: Pål Bugge/Innovation Norway

  17. NHO's Market IndexAssessment of the current general market situation and future short term market outlook.* Difference between proportion of companies who answered positive and negative. Source: NHO * For surveys from the first and second quarters, the outlook for the second half of the year is used, for the third and fourth quarter the next year is used.

  18. NHO Market Index – current situationCompanies divided by their main market sectorsAssessments of the general marked situation at the moment. Difference between positive and negative answers. Source: NHO *Companies across sectors with more than 25 % of total turnover directed towards either exports or the petroleum sector

  19. The Krone Exchange Rate Against the Euro Source: Norges Bank

  20. Exports of traditional goodsSA volume index 2000=100 Source: Statistics Norway

  21. Exports of traditional goodsPrice index 2000=100 Source: Statistics Norway

  22. Concluding remarks • An open economy – very open to and dependent upon trade • A mixed market economy with a large public sector • The current economic slowdown is affecting us, although less than many other countries photo: Jens Henrik Nybø/Innovation Norway

  23. Thank you for your attention! photo: Heidi Widerø/Innovation Norway