Business Survey and Economic Outlook for Southern and Western Norway State of the Region Autumn 2015 Kyrre M. Knudsen, Chief Economist

Growth in the global economy close to normal

« The US economy performing well, Europe is improving – counteracts slower growth in China

The oil price is halved – we believe that it will increase, but not back to the level of the past «

Business survey Share of companies (in %) that expect an increase (the rest expect a decrease)

Weaker Development among the Companies One of two companies (49 %) are positive… ….which is lower than last year. 1 Main index

The bottom is yet to be reached 2 Lower profitability, investments and order backlog, and… companies are adjusting Investments Profitability Order backlog

... ledelsen er ikke i tvil om at man kommer styrket ut av omstillingen, selv om tiltakene smerter i dag. The crisis is a warning to work smarter

Stable employment outlook 3 Some will increase employment,… some will reduce and… many have steady manning plans Employment

Majority of new jobs are created in already existing companies... vi har satt som mål å hjelpe våre samarbeidspartnere til å redde flere liv hvert år innen 2020.

Manufactuering dampened by oil decline 4 Weaker in the industrial sector, and… 2 out of 3 oil companies expect a downturn, but… Growth in the world and a weak currency improves the situation for some. a Manufactuering Construction Retail trade Other Total

Oil-exposed companies taking a hit 4 2 of 3 oil-exposed companies expect downturn (index of 31). Twice as many now seek new markets. Weak currency is positive Share of turnover related to oil and gas. ** Oil companies reporting they are seeking new markets b None* Below 1/3* More than 2/3* Oil companies seeking new markets** Average all Between 1/3 and 2/3*

The sector aims to lift turnover and production by 500% towards 2015

Significant differences between counties Hordaland most positive (56% positive) Agder close to neutral (51%) Rogaland is the least positive (42%) because of highest oil exposure 5

Industrialisation and standardisation are vital

Oil is pulling Rogaland down 5

Something positive in Rogaland 5 b

Where do we go from here? «New opportunities»«Many opportunities» «Few opportunities» «Lost opportunities» LOW OIL PRICE HIGH OIL PRICE ABILITY TO CHANGE