NAV, Norway’s state welfare agency that processes everything from pensions to unemployment benefits, has reported that local employers have warned them of upcoming layoffs that are triple the number of such notifications filed last year. NAV therefore expects unemployment to rise faster than expected.
It’s the first time that NAV has released information about anticipated staffing cutbacks, reports newspaper Dagens Næringsliv (DN). The layoff notifications signify intended downsizing and not all of them may be realized, but the numbers do not bode well for the Norwegian economy.
“The numbers indicate that the labour market will gradually become weaker,” Yngvar Åsholt, a director at NAV, told DN.
Norway’s unemployment rate has been rising since oil prices fell dramatically last year, and the most recent calculations put it at 4.5 percent. That’s relatively low compared to many other countries, not least those in southern Europe, but for Norway, it’s high compared to the virtually full employment that the country enjoyed during the oil boom of the last decade.
That boom has since gone to bust, as oil company cutbacks send ripple effects into the offshore supply and other industries. DN reported that from January to August, Norwegian employers have warned NAV that 29,960 people are likely to lose their jobs or be furloughed. That’s more than in all of last year. wrote DN. Employers are required by law to notify state officials at least 30 days in advance of all job cuts that will affect 10 people or more.
NAV has never released the numbers sent in by employers, but now believes the country needs to brace for tougher times ahead. “These numbers are important for us when we make prognoses and interpret what’s happening in the labour market,” Åsholt told DN. “These are the best numbers we have regarding what Norway can expect.”
Around 11,000 of the planned cutbacks will involve furloughs, or temporary job losses, while nearly 19,000 are actual layoffs. It’s the latter number that’s three times higher than it was in August of last year, and far more dramatic for the people involved.
“The numbers suggest we can expect higher unemployment and faster growth in unemployment in the second half of the year and on into 2016,” Åsholt told DN.