Norway’s job market over the past two years could be described as relatively healthy, thanks in part to record vacancies and demand for workers in several sectors.
“In Norway, (economic) activity grew at an annual rate of over three percent in the fourth quarter, far above normal cruising speed. At the end of February, only one and a half percent of the workforce was still registered as completely unemployed. The number of unfilled positions has increased further and is now the highest in at least twelve years,” the NHO wrote in a report.
However, the country’s employment outlook took a hit recently, with inflation outgrowing wages last year and a new report indicating that companies across Norway could cut back on staff.
The report from the Norwegian Confederation of Enterprise, published on Tuesday, said that firms expect an economic decline, lower levels of investment and poorer earnings.
“High inflation and increased interest rates will weaken households’ purchasing power and result in lower consumption growth this year. High costs and reduced demand reduce companies’ desire to hire and invest,” Øystein Dørum, chief economist at NHO, said in the report.
The NHO is the largest employer organisation in Norway, representing private-sector firms. It lobbies the government over business interests and negotiations with unions over annual collective bargaining agreements.
Some one in three firms has told the employer organisation that they will downsize in the near future. Furthermore, only one in six companies will increase the number of staff on their books.
Growth in the number of available positions and the number of people in work would also slow following several record years.
Towards the end of March, the NHO will discuss private-sector wage rises with the Norwegian Confederation of Trade Unions (LO). The NHO expects wages to increase by a decent margin, although a rise in real wages looked marginal, given how inflation estimates for the rest of 2023.
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