Downfall in the Oil Price; Challenges and Opportunities for the Construction Industry

The effects of declining oil and gas prices are being felt by economies around the world specifically oil-producing countries. The petroleum industry being the most important industry in Norway, not only contributes to the wealth in the country, but is also a very important driver for the innovation and technology development in other sectors especially the construction sector. Therefore, the current global economic situation and its impact on major oil and gas capital projects have made construction productivity improvement more and more important. Nevertheless, according to the Ansoff's theory of weak signals, strategic surprises, such as downturn in oil prices, do not appear out of the blue; rather they may be detected with the aid of pre-emptive signs, which may be referred to as early warning signs. The purpose of this study is to investigate whether an early warning system could have predicted the extent to which the oil crisis would affect the construction industry in Norway, allowing the industrial actors to react strategically ahead of time in order to exploit the opportunities created due to this situation and maintain and improve productivity under these circumstances. This is done through identifying the possible key leading indicators which could be measured in early phase of the downturn in oil capital, in order to discover these early warning signs. The next step is to verify how early a potential disruption could be predicted based on these indicators and how the industrial actors could accordingly react to this situation. This research is based on literature study including scientific publications, newsletters, white papers and available data obtained from selected news volume. The research results contribute to better understanding of the benefits of early warning systems in order for the main actors within the construction industry to effectively manage disruptions in the related industries.