Norway’s oil-driven economy, until recently among Europe’s top performers, faces years of slower growth as energy industry gloom infects other sectors, challenging policymakers who want to create jobs but fear stoking a red-hot housing market.
Having outpaced the euro zone in each of the last three years, European Union outsider Norway now expects its economy to slow by almost half compared to last year, to just 1.4 percent in 2015, and lag behind its neighbours.
Among those facing unemployment is Lars, a computer engineer in his late 50s who was told last week that his job in the technology industry had been axed. He spoke on condition his full name would not be published, reflecting unease about being out of work in a country which has long prided itself on economic success.
“The biggest consequence for me is that I could end up earning a smaller pension. It’s certainly a setback for my retirement plan,” Lars told Reuters. “I will of course try to apply for jobs elsewhere but it’s difficult to find a permanent job when you’re approaching 60.”
SLOWER GROWTH, FEWER JOBS
Unemployment hit a 10-year high in July, embarrassing the government even though at 4.5 percent of the workforce it is still less than half the 10.9 percent rate across the euro zone.
On Tuesday, engineering giant Aker Solutions announced 500 job cuts, taking its total for the year to around 1,400 out of around 16,000 as demand from oil firms falls.
“We need to protect the company and the rest of the employees by making such a choice,” Chief Executive Luis Araujo told Reuters.
“Uncertainty is there, projects are not being sanctioned, and while this happens we need to adjust our size to the market.”
Norway’s Labour and Welfare Administration (NAV) said unemployment will rise further in the coming months.
“We expect nationwide unemployment to continue to rise just as quickly as it has done so far this year, not least because we believe it will spread to other regions of the country,” Senior Adviser Johannes Sorbo said.
Unlike many other economies, which have yet to recover the ground lost in the financial crisis, Norway’s gross domestic product is now 5.7 percent above its pre-crisis 2007 peak.
Published: March 9, 2015