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Wednesday, April 24, 2024

Economy shows signs of recovery

Norway’s economic slowdown is already showing signs of shifting into reverse, say researchers at state statistics bureau SSB. The sun is definitely shining on areas like the idyllic island of Sommarøy in Northern Norway, which is cashing in on both a booming seafood industry and tourism.

The waters and scenery around Sommarøya near Tromsø are feeding strong business in both its tourism and seafood industries. PHOTO:
The waters and scenery around Sommarøya near Tromsø are feeding strong business in both its tourism and seafood industries. PHOTO:

“We see (national economic) growth gradually picking up from today’s level,” researcher Torbjørn Eika of SSB (Statistics Norway) said while presenting SSB’s annual economic outlook this week. Growth rates, he said, are expected to be high enough by the end of year “that we can call it a cyclical upturn.”

After two years of an economic slide sparked by a dive in oil prices, SSB’s economists are joining several others in thinking that it’s bottomed out. There already have been signs of unemployment levels starting to either stabilize or fall slightly in the past few months, despite announcements of more job cuts in the oil and offshore industry.

“We think unemployment overall may still rise a bit this year but not more than that the annual average rate will be 4.7 percent,” Eika told news bureau NTB.

While Norway’s mainland economy will likely only grow by 0.9 percent this year, SSB predicts a rate of 2.1 percent next year and even higher during the two years after that. The renewed growth, Eika says, will be fueled by low interest rates, the weak Norwegian krone, expansive fiscal policies by a conservative government intent on boosting employment, rising oil prices and an economic upswing internationally.

Sommarøya's idyllic surroundings belie the island's busy seafood and tourism industries. In the background, the island of Kvaløya that separates Sommarøya from Norway's northern city of Tromsø. PHOTO:
Sommarøya’s idyllic surroundings belie the island’s busy seafood and tourism industries. In the background, the island of Kvaløya that separates Sommarøya from Norway’s northern city of Tromsø. PHOTO:

The idyllic island of Sommarøya not far from Tromsø in Northern Norway is a good example of a place that’s clearly benefiting from several of the factors mentioned by Eika. Its local fishing industry is thriving again, on high demand and high prices that remain highly competitive because the weaker krone yields favourable exchange rates for customers abroad. The island’s scenery and recreational opportunities also are attracting more tourists than ever before, also because of its natural attributes and the favourable exchange rates.

Newspaper Dagens Næringsliv (DN) recently reported how construction is underway on new hotel expansion, a new fish processing plant and a new fish farming facility. The community is attracting new residents and more tourists, with the latter not just expected during the upcoming summer season. Now they’re arriving in the dead of winter, to experience the Northern Lights and whaling safaris.

“We used to be able to take a break after the Christmas holiday,” Jeanette Hustad, restaurant manager at the Sommarøya Arctic Hotel, told DN. “But now we’re busy all year round.”

Fishing revival
Per Norum, a 52-year-old local fishing boat owner, now has a brand-new vessel that can handle double the amount of fish than his older boat took on. He fishes alone and told DN that he needs to generate NOK 1.5 million a year (around USD 180,000) in order to break even. That’s not a problem now, given the prices for cod. “On a good day I can earn NOK 50,000,” Norum told DN. “Some days you can take in three tons, other days 300 kilos. No day is the same.”

The rewards are currently outweighing the risks and hard work for the fourth-generation fisherman. He was born and reared on Sommarøy and started fishing when he was 14 years old.

“It’s great that the island is beginning to blossom again,” said Rigmor Engen, age 70, while she sorted fresh fish at a new receiving station on the on Sommarøy. “There was a while when all three plants were shut down.” She’s been fileting fish for 40 years, and was hired in to train new employees who need to learn the art of sorting fish based on quality.

Hustad, who grew up on the island, told DN that “incredibly many” of those she grew up with have chosen to move back home to Sommarøya, which has an unemployment rate of just 2.2 percent. “There’s sure no downturn here, only an upturn, and that’s been going on for several years,” Hustad said. “We don’t see any signs of the oil downturn.” Berglund



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