Norway

In-depth country-focused analysis on Norway's economic, political and operational risk environment, complemented by detailed sector insight

Norway

Norway attracts a number of our clients as Western Europe's largest oil producer, and the world's second-largest natural gas exporter. In terms of GDP per capita, Norway is one of the wealthiest countries in the world. The country has a long and solid tradition of democratic governance, with emphasis on consensus-forming and negotiated solutions to political differences.

We keep our clients informed of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on eight of Norway’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our results-proven research teams. We aim to keep you ahead of the curve, so you can do business with ease in Norway.

Country Risk

Norway Country Risk

BMI View:

Core Views

  • A sharp slowdown in hydrocarbons sector investment amid a collapse in global oil prices will weigh on Norwegian GDP growth in 2015 and beyond.

  • We expect a policy response to this weaker outlook, particularly on the fiscal side. The government has the option of dipping into the country's USD850bn sovereign wealth fund, and there is a rising likelihood of tax cuts and infrastructure stimulus being introduced in the 2016 budget.

  • 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.

  • We envisage broad political continuity to the next election in 2017, with the Conservative-Progress minority coalition government achieving modest progress on its reform agenda.

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Norway Industry Coverage (8)

Autos

Norway Autos

BMI View:

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 register modest growth during 2015 due to low base effects, despite low government spending on infrastructure and the uncompetitive manufacturing sector.

As we had anticipated in 2014, generous tax and road use incentives for electric vehicles (EVs) will be wound down in Norway. However, we believe sales volumes will remain above those seen in other countries in Europe owing to the government's decision to maintain VAT and purchasing tax exemptions on new electric car sales until 2017.

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Food & Drink

Norway Food & Drink

BMI View:

BMI View: Boasting a consumer base of 25mn with some of the strongest purchasing power in the world and offering a favourable business and regulatory environment, the four Nordic markets could offer attractive investment opportunities. That said, there are limited opportunities for growth, as the economic and demographic outlook remains relatively grim. Moreover, the food and drink markets are highly concentrated, presenting significant challenges for new entrants.

Key Forecasts

Denmark

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Infrastructure

Norway Infrastructure

BMI View:

BMI View: We have downgraded our forecast for Norway's construction sector growth in 2015 to 2.0% from 4.9% in last quarter's report. We've also lowered our 10-year outlook to average 2.1% from a previous forecast of 3.2% annually. We have made these changes due to what we see being a medium-term picture of slowing oil infrastructure investment and weak economic growth. The economy is in need of diversifying away from hydrocarbon dependence, which may cause instability in the medium term. On the upside the sector is supported by a strong project pipeline, government commitment to infrastructure spending and a strong investment environment.

Key Trends And Developments

  • The government pledged in 2013 to...

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Medical Devices

Norway Medical Devices

BMI View:

BMI Industry View : The Norwegian medical device market is limited by the size of the population, but enjoys above average per capita spending of USD294. 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 domestic production geared to the export market.

Headline Industry Forecasts

  • We...

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Oil & Gas

Norway Oil & Gas

BMI View:

BMI View: New field developments and improved recovery will stabilise oil production over 2015 and 2016. Weaker oil prices will curtail investment, though the long-term impact will be masked by the vast Johan Sverdrup project starting in 2019. Gas production will also remain flat, fluctuating with European demand.

Headline Forecasts (Norway 2013-2019)
2013 2014e 2015f ...

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Pharmaceuticals & Healthcare

Norway Pharmaceuticals & Healthcare

BMI View:

BMI View: Against a backdrop of high per capita spending on medicines, an ageing population and sustained growth in healthcare expenditure, Norway is expected to remain among the seven most attractive markets in Western Europe to drug manufacturers in the foreseeable future. Despite a comparatively smaller market size, Norway's pharmaceutical sector, as distinct from several contracting drug markets in the region, is expected to continue on its long-standing positive growth trajectory, creating opportunities for drugmakers.

Headline Expenditure Projections

Pharmaceuticals: NOK20.26bn (USD3.05bn) in 2014 to NOK20.71bn (USD2.68bn) in 2015; +2.23% in local currency terms and -12.1% in US dollar terms. Forecast...

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Power

Norway Power

BMI View:

BMI View: Norway is a very mature market, and BMI therefore does not expect to see much growth in consumption, generation or new capacity over our forecast period to 2024. Hydropower will continue to be the most important source of power in the Norwegian generation mix over the next decade due to its relatively low levelised cost of energy (LCOE) - which integrates construction and generation costs over the expected lifetime of a project into the price of electricity. Given the more expensive LCOE for onshore and offshore wind power (the potential renewable energy of choice in Norway) - we expect wind power's role in the Norwegian power mix to remain limited.

Recent Developments:

  • Over the forecast period, Norway's power production...

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Telecommunications

Norway Telecommunications

BMI View:

BMI View: The Norwegian mobile market has effectively become a two-player market, despite the conditions given to ICE as part of the TeliaSonera/Tele2 deal. Telenor continues to be the dominant player across all telecoms sectors (fixed and mobile), and its greater focus on fibre services recently will help continue its leadership. As the market will not compete on price, more innovative services should appear, benefiting consumers, with Telenor's scale giving it an advantage in future drivers, such as connected objects. Its main risk is regulation, as its losses in the fixed voice segment are due to its inability to bundle that service.

Key Data

  • The mobile market has stayed stable between 5.8mn and 5.9mn subscribers since early 2013, with the main driver not being extra connections but...

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