Norwegian consumers seem to be more careful with their holiday shopping this year, and sales have slipped in comparison to last year. Economists, though, still think Norway will avoid the worst of the global finance crisis and economic slowdown.
Newspaper Dagens Næringsliv (DN) reported that sales so far in December were down 1.8 percent in Oslo from the same time last year. Merchants are noticing that customers are resisting impulse purchases.
“Folks come in and buy what they’d decided on beforehand,” Sandra Skjolde, a sales clerk at a Bik Bok clothing store in Oslo, told DN. “If they want a top for no more than NOK 500 (USD 90), for example, and I suggest a scarf or some jewelry in addition, they say no.”
Skjolde and other merchants are still waiting for a Christmas sales rush to set in. It’s by no means certain that it will. Despite Norway’s low unemployment rate and strong petroleum-based economy, many Norwegians are paring back on all the shopping they’ve been doing for the past few years. Prime Minister Jens Stoltenberg has been warning for months that Norway isn’t immune to the financial turmoil elsewhere in Europe, and perhaps consumers have listened.
Rate cut offensive
The turmoil is also what prompted Norway’s central bank to cut interest rates by a full half-point on Wednesday. Bank officials, who see signs of trouble in the euro zone seeping into the Norwegian economy, hope the interest rate cut will get Norwegians to use a bit more money, because they’re not worried any longer about inflation setting in.
Instead, growth in industrial production is weak. Shipbuilding and offshore-related companies are doing well, but production of chemical sources and some metals declined, reports state statistics bureau SSB, mostly because of declining demand in export markets. Markets for Norway’s large shipping industry are miserable.
Trade Minister Trond Giske concedes that export firms face major challenges next year, but warns against pessimism that can hurt recruitment. He seemed proud of how well Norway’s economy has held up, claiming in parliament on Wednesday that “there’s not a single country in Europe that wouldn’t want to swap numbers with Norway.”
Several economists also think the Norwegian economy will remain strong, if not robust. “Norway’s opportunities for avoiding turmoil are still reasonably good, I think,” Victor Norman, a professor at business schools NHH (Norges Handelshøyskole) in Bergen, told newspaper Dagsavisen.
Norman, a former trade and labour minister in Kjell Magne Bondevik’s center-right government, stresses that Norway is “very lucky” because oil-based economy. “Not because we use so much oil money, but because Norwegian business lives off deliveries to and from the fields,” Norman said. “As long as the oil price doesn’t get hit, Norwegian industry will continue to be much better off than other industry outside the country.”
Views and News from Norway/Nina Berglund
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