July 25 (UPI) — Though third quarter prospects are improving, the Norwegian government said industrial managers, led by the petroleum industry, are facing short-term pressures.
Norway is one of the world’s largest oil and natural gas producers and, apart from Russia, a top supplier to the European market. Statistics Norway, the government’s record-keeping agency, said the general outlook for the third quarter was positive, though some business leaders said they were expecting declines in overall employment.
“Norwegian industrial managers report a production decline compared with the first quarter of 2017, still driven by suppliers to petroleum-related manufacturing,” the agency stated.
About a quarter of the country’s gross domestic production and nearly 65 percent of its exports are tied to the oil and gas sector. In an annual update, ratings agency Moody’s said it expected real gross domestic product for Norway will increase from 1.5 percent to 2 percent next year on the back of better investments and stronger export trends.
Despite support in the mid- to upper-$40 range for the price of oil per barrel, the market is still suppressed compared with three years ago when oil sold for more than $100 per barrel.
Norwegian industrial managers report a production decline compared with the first quarter of 2017, still driven by suppliers to petroleum related manufacturing. The general expectations for the third quarter of 2017 are positive among most of the industry leaders.
For petroleum products like consumer gasoline, the government reported a net decline from last year. Total sales of petroleum products dropped 2.6 percent from June 2016, while motor gasoline sales declined 4.5 percent.
“Lower employment is most significant among producers of capital goods, which are in particularly affected by the reduced investment activity in the petroleum related industry,” Statistics Norway added.
In a snapshot of business sectors, the government ranked the short-term outlook for industries tied to oil platforms “very poor.”
Nevertheless, the overall industrial confidence was higher than the historic average that’s been prevalent since second quarter 2014.
“The general outlook for the third quarter of 2017 is positive,” the government reported.