The northern supplier industry strengthened again in 2019

Goliat-fieldGoliat-field.Photo: Jan-Morten Bjørnbakk / NTB scanpix
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Northern Norway delivered goods and services to the oil industry for almost NOK 4 billion last year. The number of man-years increased in 98 to 1,749 man-years. A drop is now expected.

According to the “Delivered 2019” report presented on Monday, supplier companies in Northern Norway were expected to exceed last year’s NOK 4.1 billion, and almost reached the target with a profit of NOK 3.93 billion. This corresponds to an increase of 4.7% since 2018 and growth for the third year in a row since the collapse of the oil price in 2014.

A total of 1,749 man-years were connected to deliveries in 2019, an increase of 98 compared to 2018.

Uncertain future

Northern suppliers were asked, early the corona period, what they thought would be the result by 2020.

The consensus is a reduction in deliveries by 2020 of almost 9% due to the fall in oil prices, with a consequent decrease in demand from the oil sector. In addition, the main suppliers of Troms have moved their operations out of the region.

It is also noted that several major development projects have had lower levels of activity in 2020.

The estimate, which is probably very uncertain, corresponds to a turnover in 2020 of NOK 3.6 billion. The number of man-years worked is expected to be reduced by 230 compared to 2019.

Most people in Finnmark

Support services are the largest, accounting for 704 man-years, with subcategories such as base, logistics, and transport, testing and inspection, personnel, consultant, and equipment. The maintenance and modification category produced 409 man-years, while construction and manufacturing contributed 275 man-years.

Almost half of the man-years were performed in Finnmark, while around a third were performed in Nordland and only one in six in Troms.

At the same time, Finnmark has the highest proportion of commuters in the supplier service, in total 67% of the jobs are done by permanent residents in the north, while the proportion in Finnmark is 55%. In Troms, the proportion of permanent residents performing the service is 86%, while in Nordland it is 74%.

10th anniversary

In connection with the tenth time that a report has been produced for the supplier industry in Northern Norway, this year’s report has been extended with a chapter on developments in the decade of 2010.

For ten years, the northern industry has traded for NOK 41.1 billion and has carried out more than 20,500 man-years associated with deliveries.

The report has also sought to highlight the domino effects of the oil industry for the region in terms of jobs and values not captured in the Deliveries reports, such as employment and turnover of publicly owned companies.

Oil provides jobs; in addition to 67% of permanent employees in the supplier industry, which amounts to 1,167 man-years, according to Statistics Norway, there are 1,368 people residing in northern Norway who work in oil activities typically with onshore or offshore operators.

According to the PANDA model (Planning and Analysis of Industry, Demography and the Labor Market Model), 2,500 man-years produce 852 indirect man-years in other industries in Northern Norway, so oil activity in the North influences employment of almost 3,400 man-years.

© NTB Scanpix / #Norway Today

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