The situation on the labor market improved earlier than expected. Unemployment has recently dropped sharply and NAV expects positive developments to continue in line with the new labor market outlook.
Unemployment has dropped significantly as infection control measures are relaxed
- The situation on the labor market looks clearer now than a few months ago. This means that we will return to more normal conditions sooner, although there are also some challenges in sight, says Hans Christian Holte, director of labor and social services.
Unemployment has fallen significantly over the past month as infection control measures ease. Only from April to May, according to data from NAV, there were 13 fewer people completely unemployed. Weekly data from NAV show that the number of completely unemployed fell even further in early June.
– Vaccinations are underway and we expect that unemployment will continue to fall as Norway reopens, and more of those laid off return to work full-time. We expect a further significant decline over the next few months, and then unemployment will fall slightly more slowly towards the end of the year and next year, says Hans Christian Holte.
On average, 95 completely out of work this year
NAV estimates that this year there will be an average of 95. completely unemployed, and in the next 75 thousand.
This corresponds to a registered unemployment rate of 3,3% and 2,6% of the workforce, respectively. For comparison, in 2019 there were on average 63 completely unemployed, which is 400%. manpower.
- This means that unemployment in 2022 will be at the same level as we had on average in 2005-2019. It's slightly higher than the historically low unemployment we had before the krone pandemic hit us, says Holte.
. An increase in the consumption of services will contribute to the growth of the economy and a decrease in unemployment
The demand for labor is high and growing. Several jobs are currently being advertised in industries that have been hit hard by the closure, such as tourism and transportation, hotels and restaurants, and work in shops. NAV estimates that the increase in consumption of services will be the most important contribution to the growth of the economy and the decline in unemployment. In addition to increased Norwegian exports of goods and services and an increase in housing investment.
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Now that Norway is opening up, many will do more of what they couldn't do. For example, there will be more cultural and sports activities, travel, training and restaurant visits, says Holte.
In some industries, it will take a long time for demand to be at the same level
Several industries are seeing rapid improvement as society reopens. Unfortunately, aviation and tourism companies are likely to face challenges for the next few years.
While many of the redundancies will return to work in a short amount of time, it will be a long time in some industries before demand is at the same level as it was before the coronavirus pandemic.
The number of bankruptcies may increase as support systems are decommissioned. In addition, the pandemic has led to lasting changes, such as the use of home offices and digital meetings, which in turn affect the demand for manpower, says Holte.
Young people were hit hardest by the crisis. Increased need for help from NAV
Long-term unemployment increased during the pandemic and a great many people were registered as jobseekers with NAV.
Market prospects work in Norway. At the end of May, there were 47 completely unemployed and job seekers who had been looking for work for over a year. However, 000 had been there for over half a year.
- We see that the crisis has hit young people the hardest, people without high school and immigrants. Many of them have worked in industries that have been particularly hard hit by the closure, and many of them are now facing more competition for jobs. That's why we expect more people to need more help from NAV to get back to work, says Holte.
