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Norway’s labour shortage: Which professions are most in need in 2023?

While the shortage of workers in Norway has decreased from 2022 to 2023, the country's economy still needs tens of thousands of workers – especially in some professions.

Worker
According to a new survey, approximately one in four businesses in Norway reported facing difficulties with recruitment, with 26 percent indicating that they had encountered challenges in acquiring labour within the last three months. Photo by Marianna Krzakiewicz on Unsplash

Businesses in Norway are still faced with a shortage of workers. According to the latest survey among companies carried out by the Norwegian Labour and Welfare Administration (NAV), some 53,000 workers are needed.

The shortage is most significant in health and care services, but there are also far too few craft and industrial workers.

“Although the estimated shortage of qualified labour is significantly lower this year, it is still very high. With the exception of 2022 and 2019, we have to go back to 2008 to find a higher level,” NAV chief Hans Christian Holte said on Monday.

The shortage of workers has decreased throughout the country compared to last year, with the exception of Troms og Finnmark.

Measured in absolute numbers, the labour shortage is greatest in Oslo, followed by Øst-Viken.

One in four businesses said they experience recruitment problems – 26 percent responded that they had had problems getting labour in the last three months.

Furthermore, many companies replied that they could not hire anyone, while others ended up hiring workers with lower or different formal skills than they were looking for.

In-demand professions in 2023

According to the NAV survey, the occupational groups with the most significant labour shortage include:

  • Nurses, health professionals, social workers, and other health workers
  • Store and sales staff
  • Cooks
  • Carpenters, plumbers, and electricians
  • Primary school teachers

The greatest labour shortage is present within health and care services, where employers report a shortage of around 13,000 workers.

While the shortage of labour in the construction industry has fallen sharply, from 13,700 people last year to 7,600 people in 2023, it is still the industry with the second largest labour shortage in Norway, the NAV points out.

Lower optimism when it comes to new hires

On the other hand, the optimism related to new hires and expansion among Norwegian companies in the year ahead is also weaker than last year.

This year, the net share of businesses that expect growth in employment in the coming year is 13 percent – a decrease from 22 percent last year and the lowest level since 2016.

Some 25 percent of Norwegian businesses expect to increase staffing in the coming year, while 11 percent expect a reduction.

At the same time, 64 percent think the staffing situation will remain the same.

The decline in expected new hires is greatest in accommodation, construction, and information and communication services.

Demand for qualified labour to increase

According to the NAV’s new global analysis, the need for qualified labour will continue to increase in the coming years.

The analysis also highlights global uncertainty and the risk of increased income differences.

“Considering the great need for skilled workers, greater provision must be made for workers to receive the training they need in the workplace. The education sector, the NAV, and employers must work together to find good solutions,” Holte said.

The NAV business survey was conducted from January 30th to March 17th among a representative sample of all the country’s public and private enterprises.

Almost 11,000 businesses took part in this year’s survey.

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MONEY

Could Norway’s weak krone trigger a shock interest rate hike?

Despite an updated forecast from Norway's central bank stating the key policy rate was likely to remain unchanged for the rest of 2024, some think a weaker-than-expected krone could trigger a surprise rate hike.

Could Norway's weak krone trigger a shock interest rate hike?

Despite appearing to be on more steady ground in recent times, and some predictions that it could even strengthen in the coming months, Norway’s krone has suffered another slump.

On Wednesday, a euro was trading for 11.77 kroner, making one euro around 50 øre more expensive than in June. A British pound was trading for over 14 kroner, a record low for the krone. A US dollar was worth 10.79 kroner on Wednesday.

“When the krone is as weak as it is now, there is a real risk of interest rate hikes for Norges Bank again,” Nils Kristian Knudsen, a currency strategist at Handelsbanken, told E24.

Knudsen said the krone was weaker than Norges Bank expected it to be in its forecast. In June, the bank announced that it would change its interest rate path and that cuts wouldn’t arrive until early 2025.

The bank has been using interest rates to curb inflation and set a target of 2 percent. The latest figures that the national data agency Statistics Norway released measured annual inflation at 2.6 percent.

READ ALSO: Why Norway’s cost of living crisis is far from over

When the new interest rate path was unveiled, the bank’s governor, Ida Wolden Bache, said the weak krone contributed to inflation.  

“The devaluation of the krone that we have behind us still contributes to keeping price growth up,” she said.

For this reason, if the situation with the krone becomes dire, then the central bank could be forced to raise rates.

However, not all economists agree with Knudsen’s outlook.

Kyrre M. Knudsen, chief economist at Sparebank 1 SR-Bank, said that inflation slowing beyond forecasts was a sign a rate cut could actually arrive this year.

“Inflation fell a lot more than expected. It is so low that there may soon be an interest rate cut this year anyway,” he told E24.

He predicted a first cut to interest rates in December, followed by a further three in 2025.

Still, Kjersti Haugland, chief economist at DNB Markets, said that the krone exchange rate meant that the central bank was unlikely to cut rates before the end of the year.

She said that the lower-than-expected inflation has convinced the market that cuts will arrive before 2025, which has weakened the krone after it was initially boosted by Norway appearing to take a slower path to cuts.

Norway having higher interest rates than other countries, in theory, strengthens the krone as the currency becomes more attractive to investors. Therefore, a slower path to cut rates is attractive to investors. 

“The fact that, due to a lower-than-expected inflation figure, the market is starting to think that Norges Bank can cut interest rates before the end of the year means that the krone is losing some support. We stood out quite a bit since Norges Bank signalled that March (2025) was the most likely time for an interest rate cut,” she said.

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