The Norwegian Economy
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Transcript of The Norwegian Economy
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The Norwegian EconomyBy Aslak Molvær, NHO
photo: Svein petter aagardInnovation Norway
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Norway – facts and figures
photo: Johan Wildhagen-www.visitnorway
Population: 5 million
Pop. Growth: 1.3 percent (2011)
GDP per capita (PPP): USD 54,200
Unemployment: 3.1 percent (Q3 2012)
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photo: Wikimedia
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
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Photo: Norwegian Design Council
The EEA Agreement
Floating currency and inflation targeting
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
The Norwegian economy of today
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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
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Competitive Norwegian industrial clusters
SEA FOOD Fishing,fish farming, equipment
PETROLEUM INDUSTRIESOil and gas companies, offshore industry, offshore service, shipping, petrochemical industries
MARITIME INDUSTRIESShipyards, ship’s gear, offshore, shipping services,maritime R&D
HYDRO ELECTRIC POWER Equipment, power generationpower distribution, metallurgical industries,fertiliser production
FOREST INDUSTRIES Saw mills, wood products, chemical wood pulp, paper industry, special products
New oppurtunities! Growth in the North
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Norway – a petroleum economy
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
Norway – a petroleum economy
Dutch Disease?
Increased public sector
Decreased productivity
Crowding out of private industry?
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A utom atisertboring
B etong -tekno log i
Løsn inger fo rekstrem t k lim a
R eservoar-tekno log i
F ly ter-tekno log i
O n-/o ffshoregassprosessering
H avbunnsproduksjonog prosessering
E lektro oginstrum entering
LN G lagring ogregassifisering
Floatertechnology
Concretetechnology
Arcticsolutions
Reservoirtechnology
LNG storage and regas
Automateddrilling
Onshore and offshore gas processing
Subseasolutions
Electro, instrumentation
40 years later1970’ies
From muscles to brainpower –from shipbuilding to 250,000 jobs in oil & gas
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9
Investments in the petroleum sector 2000 – 2011. Projections for 2012 and 2013. NOK million, current prices.
Source: Statistisk sentralbyrå
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The Norwegian Oil Sector Supply Industry- Turnover in Subsidiaries and Export
Export
Turnover in subsidiaries
Bill
ion
NO
K
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Norwegian hourly wage costs compared to trading partnersTrading partners = 100
Source: TBU/NHOHourly 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.
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photo: Innovation Norway/Heidi Widerø
Total Norwegian exports by industryBefore and after the petroleum industry
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The Government Pension Fund - Global
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The Norwegian economy is growing fast
Kilde: Consensus Forecasts, December 12
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Economic growth in EU-27Real GDP Growth. Unweighted and weighted after share of Norwegian exports
15
Source: European Commission / NHO
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The dual economy
Sectors which are hardly affected by the euro crisis – or not at all
The public sector
Domestic private consumption
The petroleum sector and some other industries (e.g. fish)
Sectors more severely affected by the euro crisis
Traditional manufacturing
Tourist industry (partly)
SMEs (problems with financing)
photo: Pål Bugge/Innovation Norway
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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.
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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.
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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
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The Krone Exchange Rate Against the Euro
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Source: Norges Bank
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Exports of traditional goodsSA volume index 2000=100
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Source: Statistics Norway
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Exports of traditional goodsPrice index 2000=100
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Source: Statistics Norway
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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
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Thank you for your attention!
photo: Heidi Widerø/Innovation Norway