It shows you just how far Europe’s economy has come that even its sickest members are starting to revive.
Case in point? Norway.
The country — one of the top 15 producers of oil in the world — saw its economy hit the skids starting in 2014 as global crude prices fell more than 70%.
Since then, crude prices have rebounded a little. But Norway’s economy made back a lot of lost ground. In the first quarter this year, Norway’s economy grew at the fastest pace in over three years. Companies are confident again too.
As Bloomberg noted recently: “The Norwegian economy is now seen emerging from the worst downturn in a generation.”
Euro Zone Economic Growth
Can the good times continue in Norway, and the rest of Europe for that matter?
The data say yes. For instance, Germany’s respected Ifo economic institute recently raised its forecast for the country’s economic growth from 1.5% to 1.8%, with another increase to an annual growth rate of 2% in 2018.
Norway’s numbers tell a similar story. The latest forecast from the Organization for Economic Cooperation and Development projects gradual strengthening in the country’s economy thanks to stronger growth of private consumption and investments.
What’s interesting about Norway’s economic rebound is that industrial output and demand for electricity are all rising by strong numbers, even though “oil and gas extraction and related services” — accounting for nearly three quarters of Norway’s total industrial production — fell by 0.4%.
What does it mean? The country’s three-year effort to restructure its economy away from oil is starting to pay off in small but meaningful ways.
For instance, Norway’s Norsk Titanium recently starting exporting its first-ever 3-D printing machines. The laser-based systems make it possible for aircraft manufacturers and makers of jet engines to digitally “print” out fully formed aircraft components from powdered titanium.
The first of Norsk Titanium’s 3-D printers — already approved by the U.S. Federal Aviation Administration — were shipped out in April, with Boeing as the first customer.
The aircraft maker says the machines will allow it to save up to $3 million per jet versus expenditures using traditional manufacturing methods. Such systems will be increasingly important to the jet maker as it seeks to continue with a long string of earnings surprises in recent years that have helped its stock price to nearly triple, from $75 to almost $200 a share, since 2013.
It all points back to a trend we’ve been harping on for the past 18 months — when it comes to finding new places to invest, Europe is still underpriced and underappreciated. Expect bigger gains to come.
Jeff L. Yastine
Editor, Total Wealth Insider
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