The Norwegian defence industry increased at a compound annual growth rate (CAGR) of 5.03% throughout 2007-2011, to reach a value of US$6.9 billion in 2012, this growth is expected to slow to a CAGR of 2.55% through to 2017, to hit an estimated value of US$7.8 billion.
Growth within the Norwegian defence industry looks set to be driven by international commitments, strengthened focus on the northern areas and an increase in home guard capabilities
The country is in the process of modernising its armed forces and home guard under the new long-term plan for the armed forces and is therefore expected to spend a cumulative total of US$37.2 billion on defence through to 2017, including US$9.9 billion on capital expenditure.
Through 2007-2011, Norway increased its defence expenditure due to a number of programs to modernise its armed forces.
Consequently, the country is not expected to embark on any major new defence acquisition programs over the next five years, a reluctance exacerbated by the fact that Norway's GDP growth is expected to slow from a CAGR of 5.45%, to a five years CAGR of 2.44%.
Although Norway allows foreign investors to enter its defence industry, and foreign and domestic investments are treated equally by law, regulations, standards, and practices within the industry often favour Norwegian, Scandinavian, and EEA investors.
Furthermore, as the country is a member of the European Defence Agency, preference is given to European defence companies, which increases the barrier to entry for non-European defence companies.
Additionally, the country follows a strict offset policy, according to which, offsets are mandatory for all transactions exceeding US$82.2 million and investors are required to reinvest 100% of the value of the contract into the Norwegian economy.
For more information on the Norwegian defence industry, see the latest research: Norwegian Defence Industry Report
Follow us on Twitter @CandMResearch
Companiesandmarkets.com issues news updates and report summaries covering all major industries and sectors. The service provides additional client monitoring and timely alerts to breaking industry and sector news leading the day's business headlines. News articles, written by our staff, contain additional analyst insight, providing value added insight for our readers. News updates and real-time alerts on newly-released market reports are also available from our Facebook page, Twitter feed @CandMResearch and RSS links. We also welcome inquiries from business journalists and the news media.