15% LESS REVENUE, 10% FEWER WORK HOURS IN 2020: Economic setbacks of COVID-19 in Svalbard wildly uneven; food/lodging drop 36%, leisure activities 38%

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The 15 percent loss of gross income and 10 percent loss of hours worked were bad for what would be a “normal” year, but hardly indicative of the “90 percent layoffs” and “99 percent loss of business” headlines Longyearbyen saw during the worst of the COVID-19 pamdemic in 2020.

But just as those scary headlines didn’t tell the full story, neither do the year-end cumulative figures for Svalbard as the loss of revenue and man hours varied widly by industry and settlement, according to a report released Tuesday by Statistics Norway.according to a report released Tuesday by Statistics Norway.

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A graph shows cumulative man years worked in Svalbard by industry for the past decade. While there has been considerable fluxuation due to factors such as the loss of coal mining and large-scale construction to replace buildings affected by climate change, the COVID-19 pandemic caused the most dramatic shifts during that period. Graph by Statistics Norway.

“Total turnover on Svalbard decreased by 15.3 percent in 2020,” the report states. “The total number of man-years has decreased by 9.7 percent.”

The hardest hit industries in terms of revenue were recreation/leisure (esentially tourism activities) at 38 percent and food/lodging at 36 percent. The strongest industries were information/communication, financing and insurance activities, which saw a drop of 5.1 percent.

“Turnover for construction, which is the second largest business area in Svalbard, is virtually unchanged,” the report notes.

Longyearbyen suffered the worst economic setback of any municipality in Norway after the pandemic was declared, part of the price for enacting extra-strict infection-control measures that resulted in the archipelago being one of only a few places on Earth that still has no COVID-19 cases.

But the losses in Longyearbyen – and the Norwegian-run settlement of Ny-Ålesund – weren’t felt as severely in the Russian settlement of Barentsburg, where the roughly 450 residents saw few or no layoffs in their tourism and mining industries. While the loss of revenue was severe, the Russian-operated settlement essentially chose to fully fund its labor staff.

The loss of man-hours in Svalbard followed similar patterns, with culture/entertainment/recreation occupations dropping 38 percent and food/lodging 24.6 percent. The latter category has dropped 37 percent since peaking in 2017.

One good bit of economic news is investments increased 50 percent compared to 2019, with the largest in food/lodging due to numerous upgrades and newly built establishments.

The information, communication, financing and insurance industries also saw strong investment activity.

“The largest increase in investments came in electricity, gas, steam and hot water supply, an increase from eight (million) to 108 million in 2020,” the report notes.