Norway’s labor market has weakened due to slump in oil sector, though growth in other sectors is absorbing some of the shock. Joblessness is still increasing, while growth in employment appears to have decelerated at the end of 2015, according to Danske Bank.
Even if the number of unemployment is increasing, the rate of rise on monthly basis is slower than the rate in H1 2015, added Danske Bank. In early 2015, the monthly rise averaged over 1500 people, but it dropped to 1000 by the end of 2015. So far in 2016, it has been at around 600-700. This shows that lay-off in oil sector from February to August of 2015 was at its peak. Joblessness is likely to increase further; however, the registered rate is expected to peak about 3.5% in the summer, noted Danske Bank.
Moreover, according to NAV, the number of new vacancies appears to be increasing again. This indicates that labor demand for non-oil sector is pretty solid, said Danske Bank. Increasing unemployment, along with rising vacancies might reflect the matching issues in the labor market, according to Danske Bank. However, this might be because of lack of geographical mobility in the labor market. Nonetheless, this indicates that increase in unemployment is exaggerating the labor market weakness to certain degree.
