– We still have a great need for labor in Norway, and we will have that in the future as well. This is what Nav chief Hans Christian Holte tells news. At the same time, Nav is coming up with a new forecast for the labor market, which states that unemployment will start to rise again. The turning point will take place this autumn. Unemployment is linked to high prices for a number of goods companies need to deliver their goods and services, such as metal and energy, at the same time as an expected lower demand for some goods and services. Norway has recently had very low unemployment. Unemployment has not been lower since 2008, and the proportion of people in work is at its highest since 2009. The removal of infection control measures in January and February led to a rapid decline in unemployment. Unemployment in tourism and transport in particular fell, industries that have been hit hard by the pandemic. But this trend will turn around in the autumn. – Will probably see more unemployed people in the retail trade and the construction industry, says Holte. – Why exactly those industries? – These are industries that will be able to get higher prices for their input factors, and also perhaps somewhat lower demand for goods or services. These are industries that will be able to have a slightly lower need for labor, says Holte. STILL LOW: Unemployment in Norway will still be what we can say is a historically low level, says Nav chief Hans Christian Holte Photo: Maria Jostad / news Difference between city and country Sverre Molvik is CEO of the developer company Selvaag Bolig. Despite the fact that the prices of goods are high, things are looking good for the industry so far, according to Molvik. – At least for us who live in the urban areas, such as Oslo, the Greater Oslo area, Stavanger, Bergen and Trondheim. There is in fact a high enough income or willingness to pay for the apartments, so that there is still profitability, despite high construction costs, says Molvik. In smaller cities, on the other hand, the willingness to pay is lower, but construction costs also increase there, according to Molvik. – Then there will be no profitability for the developers there to start construction, which will mean that the contractors, who had a contract there, will not be able to get started and are in danger of losing their jobs, of course, says Molvik. LOWER PRICES: Increased unemployment in the developer industry will mean that there will be more interest in lowering prices, according to Selvaag Bolig’s CEO Sverre Molvik. Photo: William Jobling / news The consequences of not building are primarily increased unemployment, says Molvik. – This in turn will affect costs downwards, because you get higher unemployment, which will mean that there will be more interest in lowering prices, to get started and have something to do. So it really has a positive effect on the construction industry, in the long run, says Molvik. Not a perfect match Today there are many vacancies to apply for. According to Nav, about 2,300 new vacancies have been registered per working day so far this year. In comparison, in 2019, approximately 1,700 positions were registered per working day. Demand is greatest in health, nursing and care, which account for almost a quarter of the vacancies in the workplace so far this year. When asked if it is a paradox to have increasing unemployment, at the same time as a record number of vacancies, Holte in Nav answers that the increased unemployment will still be low. – Unemployment in Norway will still be what we can say is a historically low level. At the same time, it is not the case that there is a perfect match between the unemployment that is in demand in various industries and those who are outside the labor market. This is one of the reasons for this apparent paradox, says Holte. On average, Nav expects 54,000 completely unemployed this year, and 60,000 next year. This corresponds to 1.9 per cent of the labor force this year and 2.0 per cent in 2023. – The lowest figure in the period we are now in is the end of May with 47,000 unemployed. It is 1.6 percent, which is approaching the historic low in 2008 of 1.5 percent, says Holte. Why will unemployment increase? NAV several features that make them expect that unemployment will eventually start to increase somewhat again: Inflation is very high both in Norway and other countries. This is partly due to high electricity prices, fuel prices and increased food prices. The war in Ukraine helps to reinforce this. Interest rates are rising both in Norway and other countries, which further increases the cost level for both households and businesses, and helps to curb consumption and investment. NAV therefore estimates weaker growth in both the Norwegian and international economy going forward. The influx of refugees from Ukraine contributes to increasing the labor supply in the future. At the same time, the demand for labor is also increasing, since the need for school places, housing and other things is increasing. Source: NAV Growth in the Norwegian economy slows Today, Norges Bank presented this year’s second report for the Regional Network. In the report, 300 companies and organizations respond to what they think about the economic development and prospects ahead. The companies believe that growth will slow down in the next six months. – Growth in the Norwegian economy is slowing down. Growth is slowing down on the capacity side, ie there are problems in obtaining input factors, problems with labor, wage growth is rising, price growth is rising and companies are becoming more and more uncertain about whether this will affect demand. This is what Frank Jullum, chief economist at Danske Bank, says. – We believe that we are very close to the bottom of unemployment. It is precisely because we see, for example in construction, parts of industry, parts of the retail trade and also parts of service industries, that they now expect so much lower growth, that they no longer employ at the same pace. Then the unemployment will gradually flatten out, and maybe also gradually rise a little, says Jullum. Chief economist at Danske Bank Frank Jullum does not believe in a double interest rate hike from Norges Bank at the interest rate meeting next week. Photo: Danske Bank Jullum points out that wage growth is under control. – Wage growth is at a level that does not indicate that the long-term or medium-term price expectation will be too high. The wage and price spiral in Norway is not as strong as we could have feared, says Jullum. Jullum therefore does not believe in a double interest rate hike from Norges Bank at the interest rate meeting next week. – No, we think they will deliver a quarter of a percentage point next week. We see no reason why they should deviate from the plan now, but we should not rule anything out, of course, says Jullum.
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unemployment will increase again – news Norway – Overview of news from different parts of the country
