In the beginning phases of the Norwegian oil age, the impulses to other economic sectors were modest. Over the years, we have developed an internationally competitive petroleum supply industry of considerable scope. While the companies operating on the Norwegian continental shelf had to import virtually all their equipment in the 1970s, the import share has now dropped to just below 40 percent. The Norwegian engineering industry has flourished. The supply industry has become a major export industry. Almost two-thirds of total Norwegian exports are now linked to the petroleum industry. Chart 7  BIS central bankers’ speeches  7  Vigorous activity in the oil and gas industry helped Norwegian manufacturing sectors during the financial crisis. The petroleum industry is a buffer against the current downturn in advanced economies. In that respect, the Norwegian economy has become more robust. The flip side of the coin is that our economic future is becoming increasingly dependent on oil and gas activities. The substantial petroleum revenues and the spillover effects from oil and gas production are reflected in the labour market and are driving up house prices and debt. Thus, the Norwegian economy is also vulnerable. In the mid-1980s, the Norwegian economy was shaken by a sharp and long-lasting fall in oil prices. Today’s situation is quite different. Oil prices are persistently high, reflecting the emergence of newly industrialised countries. But it is risky business to take today’s oil price levels for granted. New energy technologies are being developed. Climate challenges will not disappear.
Øystein Olsen: The economic outlook Speech by Mr Øystein Olsen, Governor of the Norges Bank (Central Bank of Norway), to invited foreign embassy representatives, Norges Bank, Oslo, 4 April 2013. The speech is based on the annual address 2013, Monetary Policy Report 1/13 and previous speeches. Please note that the text below may differ slightly from the actual presentation. *  *  *  Excellencies, Ladies and Gentlemen, First of all, I would like to welcome you to Norges Bank. Five years after the financial crisis started, growth is weak and unemployment high in many countries. The economic situation in Norway stands in contrast to developments abroad. Norway’s economy is still growing and unemployment remains low. There is a tendency to see ourselves as a country apart. Truly, Norway’s oil and gas resources provide an economic base that few other countries enjoy. Income levels are among the highest in the world. At the same time, our increasing dependence on oil and gas increases the vulnerability of the Norwegian economy. The theme of my presentation today is how to enhance the resilience of the Norwegian economy. When the financial crisis washed over the Norwegian banking sector in autumn 2008, we were reminded of how dependent we are on the world around us. Nonetheless, the Norwegian economy weathered the crisis well. After about a year, the downturn in Norway was over.