Norwegian business group warns of crisis
The sharp fall in the global price of oil has caused the Confederation of Norwegian Enterprise to warn that 2015 could see the lowest economic growth in the country since the financial crisis.
NHO said in its latest quarterly report that it expects a 10% cut in investment in the industry, which accounts for the bulk of Norway’s exports.
“NHO’s member companies expect lower activity in coming quarters. 2015 could therefore be a year with the lowest growth since the financial crisis. This applies to most industries. Most negative about 2015 are petroleum related businesses,” the Confederation said.
The outlook for the oil and gas sector means that the country may become more dependent on other sectors to support exports going forward. Evidence from 2014 suggests that compared to 2013 there have already been significant increases in exports of fish, metals, machinery and chemical products.
However, NHO warns that the financial crisis has already caused a significant shift in habits of households. It suggests that after the financial crisis the average growth in private consumption has halved. The most important reason for households increasing savings is probably the higher interest rate burden that follows the growth in prices for residential properties.
“One implication of this is that economic growth in Norway could remain low for several years.”
According to Olso Børs, the OBX index of the 25 most liquid shares in the local market is up 4.2% over 12 months in local currency terms.
However, the OAX10 index of energy shares, including companies involved in oil exploration and provision of oil rigs, is down 32% over the past year.