Norway’s Maritime Equipment Industry Booming Again
The Federation of Norwegian Industries has released the Norwegian Maritime Equipment Suppliers 2014 report. In total, ship's equipment suppliers export goods and services to a value of just over NOK 45 billion (US$7.5 billion). This is equivalent to eight per cent of Norway's exports of goods and services (excluding oil and gas).
If suppliers of drilling equipment and specialist marine equipment are included, exports increase to NOK 75 billion or 12 per cent of Norwegian exports. This is much higher than exports of seafood from Norway, for example, which was equivalent to NOK 50 billion in 2012.
Maritime equipment manufacturers experienced tremendous growth from 2004 to 2008, when sales virtually trebled and profitability rose. The industry has experienced a much lower rate of growth in the years since the financial crisis, and in 2010 and 2011 turnover dropped. This trend turned around in 2012 when turnover increased by 14 per cent in comparison with the previous year. A turnover of NOK 63 billion in 2012 is still lower than the peak year of 2008, but the indicators are pointing upwards again.
The companies within the industry are exposed to considerable international competition, illustrated by the fact that almost 90 per cent of turnover comes from export markets. This takes place either directly through sales to customers abroad or indirectly through deliveries to shipyards or shipping companies in Norway who operate actively abroad.
For 2013, the growth in turnover is expected to be nine per cent, more or less in line with average growth over the past eight years. The future prospects are also positive. Today, order books are approximately equivalent to one year's turnover and have increased in the past 12 months. Half of the companies also expect further growth from 2013 to 2014. Only 10 per cent expect a drop in turnover this year.
Møre og Romsdal and Hordaland are by far the two largest counties in terms of ship's equipment production. Together they are responsible for almost half of the industry's wealth creation. At the same time, a total of 11 out of 19 counties have wealth creation of more than NOK 500 million, so suppliers of ship's equipment are important throughout large parts of the country.