Press release from the Norwegian Technical Calculation Committee for Wage Settlements

The basis for wage settlements in 2009 – preliminary report.

This report outlines recent years’ developments in wage, earnings, prices and competitiveness. The Committee also presents a projection of consumer price growth from 2008 to 2009 and briefly describes prospects for the international and Norwegian economy. The report is based partly on preliminary figures and estimates for 2008. Parts of the report will therefore be updated towards the end of March.

 

Main points of the report
Average wage growth from 2007 to 2008 is estimated at 6 per cent compared with 5.4 per cent in 2007. Wage growth last year – the highest since 1998 – varied between 4.4 per cent and 6½ per cent in the major bargaining areas apart from financial services where high bonus payments led to wage growth as high as 9.2 per cent in 2008.

The wage carry-over into 2009 is estimated to average 2¼ per cent, about ¼ percentage point higher than into 2008. The wage carry-over into 2009 varies from 0.9 per cent for employees at firms affiliated to the Federation of Norwegian Commercial and Service Enterprises (Handels- og Servicenæringens Hovedorganisasjon, HSH) in retail trade to 3⅓ per cent in the central government sector.  

In the local government sector already agreed increments for 2009 bring wage growth of 2 percentage points in this sector from 2008 to 2009. The increment pushes up wage growth for the entire economy by about 0.3 percentage points from 2008 to 2009.

Growth in executive wage in 2008 in industries for which wage statistics are available was consistently clearly higher than for wage earners in general. For managing directors and others with managerial functions in the financial industry, wage growth averaged as much as 28.6 per cent. Bonuses are included in these figures, whereas options and benefits in kind are not included.

Real after-tax wage for wage earners as a whole increased by 2.0 per cent from 2007 to 2008 compared with 4.5 per cent the previous year. The decrease is largely related to appreciably higher price growth in 2008 than the previous year.

The Committee estimates an average price growth of about 2 per cent from 2008 to 2009, down from 3.8 per cent the previous year. The uncertainty in the estimate for 2009 relates above all to the krone exchange rate ahead, which will affect prices of consumer imports, and energy prices.

Cost competitiveness in manufacturing, measured by relative hourly wage costs for manual manufacturing employees in a common currency, has weakened over the past few years. From 2007 to 2008 the weakening is put at 1.9 per cent. Contributory factors are a far quicker increase in wage costs in Norway compared with our trading partners and appreciation of the Norwegian currency.

Given the exchange rate over the year, average hourly wage costs in manufacturing in Norway in 2008 are estimated to be about 28 per cent higher than a trade-weighted average of our EU trading partners. For manual manufacturing employees alone Norwegian costs are estimated to be 43 per cent higher than among Norway’s trading partners.

 

Enclosures

 

Table 1. Annual wage growth from 2007 to 2008 and wage carry-over into 2009 in some bargaining areas

	Wage growth from 2007 to 2008 in per cent	Wage carry-over into 2009 in per cent
Manual manufacturing employees at firms affiliated to NHO*	5¾	1¾
Non-manual manufacturing employees at firms affiliated to NHO	6¼	2½
Employees at firms affiliated to HSH**, retail trade	4.4***	0.9
Financial services	9.2	2.0
Central government	6⅔	3⅓
Local government	6½	2 ⅓
Employees at firms affiliated to Spekter****, excluding health trusts	6¼	1¾

* Confederation of Norwegian Enterprises
** Federation of Norwegian Commercial and Service Enterprises
*** Break in the pay statistics. New firms entering the statistics in 2008 pushed down pay growth.
**** Employers Association.

 

Table 2. Wage growth from 2007 to 2008 for managing directors and managers of small firms in some sectors.

	Managing directors*		Managers** of small firms
	Pay growth in per cent 2007-2008	Pay level 2008	Pay growth in per cent 2007-2008	Pay level 2008
Financial services	28.6	1 602 900	12.0	891 800
Manufacturing	13.3	889 400	5.5	535 500
Retail trade	10.0	733 200	1.9	441 800
Construction	6.2	685 600	12.1	533 800
Oil and gas extraction and mining	5.9	1 172 000	-	-

* Managing directors at firms with 10 or more employees. Can include several persons with managerial functions at each firm.
** Managers of small firms with 5-10 employees.

 

Contact
Contact person for further information: Committee chairman Øystein Olsen, Statistics Norway (Statistisk sentralbyrå), tel. 47 21 09 49 90 / 47 918 27 944 or e-mail: oyo@ssb.no