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.

  • The policy response will be crucial. The government has the option of expanding fiscal policy by dipping into the country's USD890bn sovereign wealth fund, and the central bank may ease policy more aggressively.

  • 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.

Key Forecast Changes

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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 potentially hold lots of attractive investment opportunities. That said, we note limited opportunities for growth as the economic and demographic outlook remains relatively grim and the food and drink markets are highly concentrated, thus presenting significant challenges for new entrants.

Key Forecasts

Denmark

  • Food consumption (local currency) growth year-on-year (y-o-y) in 2015: +3.6%; compound annual growth rate (CAGR) 2014-2019: +4.5%

  • ...

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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 and wind generation, especially offshore, are set to grow the most, as Norway replaces its aging hydropower capacity. A number of large-scale hydro and wind power projects are currently in development and the government recently increased equity in Norway's largest utility Statkraft, which will grow the company's borrowing power and investments into the power sector. Adding gravitas to the growth of wind capacity is Norway's recent proposal to lower taxes to wind developers to bring the fiscal regime in line with neighbouring Sweden.

Recent Developments:...

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Telecommunications

Norway Telecommunications

BMI View:

BMI View: A change in competitive dynamics is expected in Norway's electronic communications market in 2015. Tele2's subsidiary Network Norway was sold to NetCom and albeit according to the publicised terms NetCom was only due to purchase Tele2's infrastructure it now looks like most customers have also decided to stay. This will significantly boost NetCom's market share and accelerate NetCom's expansion of 4G and mobile broadband coverage. Both NetCom and Telenor are in the process of rolling out LTE-Advanced services, which will create competition for high-value data products. Meanwhile, TDC Norway acquired Get, the country's largest alternative cable broadband operator and placing increased pressure on incumbent Telenor in the converged services arena.

Key Data

  • BMI...

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