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WORKING IN NORWAY

What is the outlook on Norway’s labour market for foreigners beyond 2023?

As Norway's labour landscape continues to change, the prospects for foreign job seekers beyond 2023 are gaining significant attention.

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Norwegian employers are reporting a shortage of (foreign) labour. Photo by Anatol Rurac on Unsplash

In Norway’s dynamic job market, certain sectors are experiencing a surging demand for labour, while others are witnessing a shift in the balance.

Norway’s position as an attractive destination for international talent seems to continue to hold strong – despite the recent surge in prices, weakening krone, and housing shortage.

READ MORE: Weak krone, soaring prices: Is Norway still an attractive country for foreign workers?

Parts of Norway’s job market in large demand for labour

At the moment, Norwegian employers are reporting a shortage of (foreign) labour, although the situation isn’t as bad as in 2022.

“The Norwegian employers are indeed reporting trouble finding labour, but less so than a year ago. According to the NAV’s survey among Norwegian firms this spring, Norwegian firms had tried, but not succeeded, in hiring about 50,000 workers (compared to 70,000 a year ago),” Johannes Sørbø, a labour market expert at the Norwegian Labour and Welfare Administration (NAV), told The Local.

“Especially the health sector had a hard time finding enough labour, but also part of the manufacturing sector, construction, hotels, etc. This survey was conducted in February and March.

“Since then, unemployment has started to increase a bit, especially in the construction sector. Other parts of the labour market, however, are still in large demand for labour,” Sørbø said.

In-demand professions

Although labour market shortages have improved slightly, the current level remains the highest for more than a decade, with the exception of 2019 and 2022.

Based on the aforementioned survey, health and care services face the most pressing labour shortage. This shortage also extends to craft and industrial roles, highlighting the need for specialised skills across industries in Norway.

READ MORE: Which professions are most in need in Norway in 2023?

While shortages have eased across much of the country, the Troms og Finnmark region remains an exception. In urban centres, Oslo and Øst-Viken are particularly affected by a lack of workers. 

As highlighted by the NAV survey, a range of occupational groups bear the brunt of the labour shortage. These include healthcare roles, store and sales staff, cooks, carpenters, plumbers, electricians, and primary school teachers.

Opportunities in 2024 and beyond

Sørbø said he expects unemployment in Norway to increase in the years ahead and that people looking for a job in the country will likely encounter opportunities.

“We expect unemployment to increase a bit more in the year to come, but we still expect a good labour market for people who seek a job in the years to come. In some sectors, such as the health service, we expect the lack of labour to continue,” he said.

The general manager of Relocation AS, a Norwegian company that supports foreign workers who move to Norway, Cynthia Myrnes, thinks the conditions and opportunities for skilled foreign workers looking to land a job in Norway will improve in the years ahead.

“Absolutely! Norway is in need of skilled workers, so authorities and businesses are working together to make it more attractive for foreigners to relocate to Norway,” Myrnes told The Local.

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ECONOMY

‘Turning point’: What the future holds for Norway’s economy

The standstill in Norway's economy may soon be at an end, according to a new report from Norway's national data agency. The agency isn't alone in its optimistic outlook, as the country's PM has said the country is at a 'turning point'.

'Turning point': What the future holds for Norway's economy

Norway’s economy should begin to pick up in the coming months and years after a period of stagnation, according to a national data agency, Statistics Norway, in a forecast on the Norwegian economy.

“With lower interest rates and clear wage growth, household consumption will increase. Economic activity will also pick up as a result of increased public consumption and an increase in housing investment,” said Thomas von Brasch, head of research at Statistics Norway.

The stagnation would likely continue for the rest of 2024 before picking up in 2025 and returning to a more neutral position in 2026.

“The standstill in the Norwegian economy is soon over,” von Brasch said.

After a period of high inflation, peaking at 7.5 percent in October 2022, price rises have begun to moderate. During this period, inflation in Norway was at its highest level since the 1980s.

This is good news for those hoping for lower interest rates, as the central bank had raised rates rapidly to try and control inflation and get it towards a target of two percent.

“Lower inflation at our trading partners will cause inflation here at home to continue to fall. Reduced interest rates internationally also contribute to the policy rate being gradually cut in Norway,” von Brasch said.

After the latest inflation figures for Norway were released, many economists predicted that the first cut would arrive around December. Between May 2023 and May 2024, inflation was measured at 3 percent.

READ ALSO: What Norway’s latest inflation figures mean for your finances

Market rates, the interest rates consumers pay, are expected to fall from around 4.7 percent this year, to 4 percent next year, and 3.5 percent the year after.

Norway’s PM, Jonas Gahr Støre, said the Norwegian economy was at a “turning point”, with the future looking much more positive for those in Norway.

“It is good news for people’s finances and clearly confirms that we are at a turning point in the economy where people can get better advice. Statistics Norway estimates that price growth will continue downward, so interest rates can eventually be lowered. They also expect increased purchasing power for people this year and in the following years. The government aims for people to get better advice,” PM Jonas Gahr Støre told Norwegian newswire NTB.

One factor that had the researchers at Statistics Norway more uncertain was the development of the Norwegian krone.

“The development in the krone exchange rate is important for inflation, among other things through import prices measured in Norwegian kroner. There is great uncertainty surrounding exchange rate movements,” the report read.

However, it added that keeping exchange rates the same in the coming years could be considered a positive development. This may disappoint those who have been negatively affected by a weakened krone.

Still, there was much better news when it comes to wages. Over the past eight years wages have barely grown in real terms, meaning price increases have outpaced wages. Workers in Norway can look forward to real wage increases of around 1.5 percent until 2027.

Unemployment would rise slightly in the coming years, though, from 4 percent currently to 4.2 percent in 2025.

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