Norwegian wage settlements in 2012

The Norwegian Technical Calculation Committee for Wage Settlements presents the preliminary report on the basis for wage settlements in 2012.

The report outlines recent years’ developments in pay, incomes, prices and competitiveness. The Committee also presents a forecast of consumer price growth from 2011 to 2012 and briefly describes prospects for the international economy and the Norwegian economy. The report is based partly on preliminary statistics and estimates for 2011. Parts of the report will therefore be updated at the end of March, inter alia with pay development figures for women and men.

 

Summary of main findings

The Calculation Committee estimates average pay growth from 2010 to 2011 for wage earners as a whole to 4.3 per cent. For employees in the major bargaining areas (i.e. employees at enterprises affiliated to an employer’ organisation and employees in the public administration including the health trusts), the Committee estimates wage growth of 4¼ per cent. Differences in pay growth between the major bargaining areas were smaller in 2011 than in 2010. Pay growth varied between 3.6 per cent and 4.9 per cent.

The wage carry-over into 2012 is estimated to an average of 1¼ per cent for employees in the main bargaining areas, about ¾ percentage point lower than in 2011. The wage carry-over into 2012 varies from ¾ per cent for health trust employees to 1¾ per cent for non-manual manufacturing employees at firms affiliated to the Confederation of Norwegian Enterprise.

Growth in executive pay in 2011 in industries for which pay statistics are available was with some exceptions higher than for wage earners in general in the same industries. For managing directors and others with managerial functions in financial services, pay growth in 2011 was 16.4 per cent. In manufacturing, pay growth for this managerial segment was 8.7 per cent, and in retail trade 0.3 per cent. Bonuses are included in these figures whereas options and benefits in kind are not included.

Real after-tax pay for wage earners on average is expected to have increased by 3 per cent from 2010 to 2011, compared with 1.1 per cent the previous year. Somewhat higher pay growth and appreciably lower consumer price inflation in 2011 than in 2010 pushed up growth in real after-tax pay.

The Committee estimates an average consumer price growth of about 1¼ per cent from 2011 to 2012. The figure for 2011 was 1.2 per cent. The uncertainty in the inflation forecast for 2012 relates partly to energy prices, which often fluctuate widely through the year; much uncertainty also attaches to the krone exchange rate and international commodity prices.

The Calculation Committee presents a number of quantified indicators to describe Norwegian business and industry’s international competitive position. Several of these components, in particular cost indicators, suggest a weakened situation for Norwegian firms in recent years. This picture contrasts somewhat with the figures for employment and actual output in Norway compared with other countries. Whereas a series of aggregate indicators appears better for Norway than for many other countries thus far, Norway’s high cost level means that firms’ competitiveness ahead may prove uncertain in parts of the economy.

Cost competitiveness in manufacturing, measured by relative hourly wage costs in a common currency, has weakened over the past few years. From 2010 to 2011 the higher growth in wage costs in Norway than among our trading partners along with an appreciation of the Norwegian currency caused relative hourly wage costs in Norway measured in a common currency to rise by 3.7 per cent. Exchange rate movements accounted for just over 2 percentage points of this figure.

Average hourly wage costs in manufacturing in Norway in 2011 were an estimated 55 per cent higher than a trade-weighted average of our EU trading partners, measured in a common currency. For manual manufacturing employees alone, Norwegian hourly wage costs are estimated to be 57 per cent higher than among Norway’s trading partners in the EU.

 

Enclosures

Table 1. Annual pay growth from 2010 to 2011 and wage carry-over into 2012 in some bargaining areas

	Pay growth from 2010 to 2011 in per cent	Wage carry-over into 2012 in per cent
Manual manufacturing employees at firms affiliated to NHO1	4¼	1½
Non-manual manufacturing employees at firms affiliated to NHO1	4½	1¾
Employees at firms affiliated to Virke2, retail trade	3.6	1.0
Employees in financial services	4.9	1.3
Central government employees	4	1
Local government employees	4½	1
Employees at firms affiliated to Spekter3, excluding health trusts	4.1	1.2
Health trust employees	4	¾

1. Confederation of Norwegian Enterprise
2. Federation of Norwegian Enterprises
3. An employers’ association.

 

Table 2. Pay growth from 2010 to 2011 for managing directors and managers of small firms in some sectors

	Managing directors1			Managers of small firms2
	Pay growth	Pay level3	No. in sample 2011	Pay growth	Pay level3	No. in sample 2011
Manufacturing	8.7	999 600	1 066	6.4	595 200	717
Construction	1.1	742 800	674	2.1	572 400	998
Retail trade	0.3	729 600	2 930	1.0	466 800	7 058
ICT	5.6	1 088 400	918	11.9	780 000	290
Financial services	16.4	1 676 400	645	-	-	-
Business services	5.6	842  400	337	3.9	573 600	336

1. Managing directors and others with managerial functions at firms with 10 or more employees.
2. Managers of small firms with fewer than 10 employees.
3. Monthly pay as of September/October exc. overtime x 12. The wage concept comprises contractual pay, irregular increases and bonuses.

 

Contact 

Contact person for further information:
Committee chairman Ådne Cappelen, Statistics Norway (Statistisk sentralbyrå), tel. + 47 488 82 950 or e-mail: adne.cappelen@ssb.no.