Norwegian Construction Market Projected to Expand by 1.8% This Year

According to a new report, the Norwegian construction industry is projected to expand by 1.8% in real terms this year, following an annual growth of 1.2% in 2021.

The industry’s output in 2022 will be supported by greater investments in the oil and gas sector, as companies seek to benefit from the temporary tax breaks, higher oil prices, and Europe-wide gas shortages, which have been triggered by the Russia-Ukraine crisis.

According to a survey conducted by the national statistics office Statistisk sentralbyra (SSB) in late May 2022, oil and gas companies are expected to invest NOK167.2 billion ($19.4 billion) in Norway in 2022 – up from an earlier (February 2022) forecast of NOK159.5 billion ($18.5 billion) in investments this year.

However, rising inflation and surging construction material prices could pose a significant downside risk to the industry’s output in 2022. According to the SSB, the average construction cost index for residential buildings rose by 11.7% year on year (YoY) in the first five months of this year; this growth is attributed to a rise in prices of both materials (24% YoY) and labour (3.5% YoY).

In addition to this, the recent (late June 2022) increase in the benchmark interest rate and the possibility of further rate hikes throughout the year could weigh on investor and consumer confidence, and impact on investments in the residential sector over the coming quarters.

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The Norwegian construction industry is expected to record an annual average growth rate of 2.3% from 2023 to 2026, supported by investments in the transport and renewable energy sectors. In February 2022, the Norwegian Public Roads Administration (Statens Vegvesen) announced that it will invest NOK207.6 billion ($24.1 billion) in developing the country’s road network from 2022 to 2027. Moreover, in late June 2022, the government unveiled a roadmap to drive green industrial growth in the country.

The roadmap aims to facilitate faster development of projects within seven areas, including offshore wind, hydrogen, batteries, and the maritime industry. As part of the roadmap, the government will develop coherent and profitable battery and hydrogen value chains, and provide 30GW in offshore wind capacity by 2040.

The full report, titled ‘Norway Construction Market Size, Trends and Forecasts by Sector’ is available to purchase from Research and Markets and provides detailed market analysis, information and insights into the Norwegian construction industry, including:

• The Norwegian construction industry’s growth prospects by market, project type and construction activity
• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Norwegian construction industry
• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline

For further details, click here.

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