Should workers in Norway be worried about a rise in unemployment
Unemployment in Norway has recently risen to its highest level in over two years, figures from Statistics Norway show, with some industries more heavily affected than others.
Unemployment in Norway is on the rise, and 3.9 percent of the country’s workforce was unemployed as of January, according to the latest figures from the national data agency Statistics Norway (SSB).
Some 117,000 people were out of work, the figures released this week show. That marks a notable increase of 2,000 unemployed people compared to December.
READ MORE: What kind of jobs do immigrants in Norway have?
As the unemployment figures presented by Statistics Norway have been adjusted for seasonal variations and trends, the increase cannot be explained by typical seasonal patterns.
Of particular note is the demographic breakdown, revealing that much of the rise in unemployment is concentrated among men aged 25 and over.
"Approximately two-thirds of last year's increase in unemployment was among men," Tonje Køber, the section head for labour market and wage statistics at Statistics Norway, said.
As unemployment rates climb, workers may understandably worry about job security and the overall health of the job market in Norway.
But what's behind this job market cooldown?
Construction sector slowdown driving the unemployment hike
Some of the increase in unemployment figures can be attributed to the poor situation in the Norwegian construction industry, Kristian Myklathun, a senior advisor in the Norwegian Labour and Welfare Administration (NAV), told The Local.
"In the past year, we have witnessed a rise in unemployment among individuals with a background in construction work. The slowdown in new construction projects is closely linked to increased construction costs and interest rate hikes. The interest rate increases contribute to the heightened cost of capital and also have a dampening effect on housing prices," Myklathun said.
READ MORE: Six ways to improve your chances of finding a job in Norway
He added that the retail sector and certain service industries have also recently seen unemployment rise. Myklathun said this was due to slow wage growth and increased interest rates.
Unemployment expected to increase further
NAV believes that Norway's unemployment rate will likely increase in the coming year. The increase will primarily be seen in the construction sector.
"The primary factor behind this expectation is the limited number of new construction projects, which is anticipated to lead to increased unemployment in the construction sector in 2024," Myklathun
He added that unemployment in retail and certain service sectors will experience a short-term increase in unemployment before stabilising over time.
Erik Horgen, a senior adviser at Statistics Norway, told The Local that their current forecast for 2024 is an unemployment rate of 3.9 per cent and 4.1 per cent for 2025.
For the majority of workers, this means a huge increase of unemployment from current levels isn't to be expected.
However, NAV also publishes its own figures, which are separate from those from Statistics Norway, and it will publish its figures on Friday, March 1st.
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Unemployment in Norway is on the rise, and 3.9 percent of the country’s workforce was unemployed as of January, according to the latest figures from the national data agency Statistics Norway (SSB).
Some 117,000 people were out of work, the figures released this week show. That marks a notable increase of 2,000 unemployed people compared to December.
READ MORE: What kind of jobs do immigrants in Norway have?
As the unemployment figures presented by Statistics Norway have been adjusted for seasonal variations and trends, the increase cannot be explained by typical seasonal patterns.
Of particular note is the demographic breakdown, revealing that much of the rise in unemployment is concentrated among men aged 25 and over.
"Approximately two-thirds of last year's increase in unemployment was among men," Tonje Køber, the section head for labour market and wage statistics at Statistics Norway, said.
As unemployment rates climb, workers may understandably worry about job security and the overall health of the job market in Norway.
But what's behind this job market cooldown?
Construction sector slowdown driving the unemployment hike
Some of the increase in unemployment figures can be attributed to the poor situation in the Norwegian construction industry, Kristian Myklathun, a senior advisor in the Norwegian Labour and Welfare Administration (NAV), told The Local.
"In the past year, we have witnessed a rise in unemployment among individuals with a background in construction work. The slowdown in new construction projects is closely linked to increased construction costs and interest rate hikes. The interest rate increases contribute to the heightened cost of capital and also have a dampening effect on housing prices," Myklathun said.
READ MORE: Six ways to improve your chances of finding a job in Norway
He added that the retail sector and certain service industries have also recently seen unemployment rise. Myklathun said this was due to slow wage growth and increased interest rates.
Unemployment expected to increase further
NAV believes that Norway's unemployment rate will likely increase in the coming year. The increase will primarily be seen in the construction sector.
"The primary factor behind this expectation is the limited number of new construction projects, which is anticipated to lead to increased unemployment in the construction sector in 2024," Myklathun
He added that unemployment in retail and certain service sectors will experience a short-term increase in unemployment before stabilising over time.
Erik Horgen, a senior adviser at Statistics Norway, told The Local that their current forecast for 2024 is an unemployment rate of 3.9 per cent and 4.1 per cent for 2025.
For the majority of workers, this means a huge increase of unemployment from current levels isn't to be expected.
However, NAV also publishes its own figures, which are separate from those from Statistics Norway, and it will publish its figures on Friday, March 1st.
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