Joakim Lystad, head of Norway’s work and welfare agency NAV, has some sobering news regarding the country’s low unemployment rate. It’s now rising faster than expected, and the numbers of people without jobs are likely to soon hit their highest level since 2004.
Lystad has unveiled new statistics showing that the numbers of people registered as being jobless in Norway rose from just over 75,000 to 82,000 during the past year. The number is now expected to rise to 90,000 next year, the highest in more than a decade.
“In our earlier prognosis, we expected that oil investments would pick up again next year,” Lystad told newspaper Dagens Næringsliv (DN) on Tuesday. “We don’t expect that any longer. Because of the major decline in oil prices, we expect that oil investments will continue to fall during the next year, and that unemployment will rise as a result.”
Thousands of jobs have already been slashed in Norway’s oil and offshore industry during the past year and more job losses are likely. While many engineers and other oil sector workers have found jobs in other sectors, NAV is bracing for a rise in unemployment claims.
Lystad hastens to add that the rise won’t be dramatic, and Norway’s unemployment rate will remain relatively low by international standards. With 90,000 people out of work, he notes, the unemployment rate will rise to 3.2 percent in 2016, a big jump after years with a booming economy but low compared to other countries in Europe alone.
“We expect that unemployment will increase the most among engineers, information technology and industrial workers in the oil sector,” Lystad told DN. Since that’s likely to dampen consumption, he said, other sectors including retailing may be hit as well.
The outlook is much better in other export industries, largely because a weaker Norwegian currency, the krone, has made exports more competitive. “So we’re expecting more hiring among export firms, and the outlook is also good in the construction industry,” Lystad said. Demand for housing, for example, remains high.
Higher unemployment in Norway can discourage more southern European labour migrants from heading north to find work, Lystad said. “With lower demand for labour and rising unemployment, fewer labour migrants will come here,” he told DN.