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The Bank of Norway predicts wage growth
The Bank of Norway predicts that salaries will continue to increase, along with a low interest rate. "This is not a surprising
consequence of a very solid economic development, and a tight labor market," says Head of the Central Bank Øystein Olsen.
The result is that wages could continue to increase for the next few years, but at the same time probably put us ahead of
our trade partners, he explains.
This year's central wage negotiations will lead to an increase of at least four percent, after a strike in the public sector and heavy discussions. Still, the Bank of Norway predicts an even further increase next year of 4,25 percent, before the rate settles at 4,40 percent in 2014 and 2015.
Most likely, this will reinforce the image we've seen over a long period of time - a weakened competition abroad, Olsen explains. As a result, certain businesses will be squeezed out of the market and will have to cut their staff, little by little," he says. "Resources will be allocated towards the public and service sector."
In spite of higher salaries, Olsen predicts that the price level will increase at a higher rate than wages the next few years. By 2015, he suspects a price growth of 2,5 percent, which means that the real wage increase will end up at 2 percent. Still, over the course of five years the total wage increase will be just under 14 percent.
As an extra bonus to wage earners, interest rates seem to remain low. Yesterday, the key interest rate was set at 1,5 percent.
According to Olsen, the first increase will come sometime between December this year and June 2013.
Source: The Norway Post, 21.6.2012
NPD is processing development plan for Svalin - 25/11-16
The Norwegian Petroleum Directorate has received plan for development and operation (PDO) of 25/11-16 Svalin in the North
Sea.
The Svalin field is located approximately six kilometres southwest of the Grane facility. Statoil is the operator with an ownership interest of 57%; the other licensees are Petoro (30%) and ExxoMobil (13%). The licensees are planning to invest a total of NOK 4.46 billion in this development.
Recoverable reserves on Svalin are estimated at approximately 12 millions standard cubic metres of oil. The reserves are divided equally between the two deposits Svalin C and Svalin M.
According to the plan, Svalin will be a combined development tied in to Grane where Svalin M will be produced through a double branch well drilled from the Grane facility, while Svalin C will be a subsea well tied in to Grane through a six kilometre long production flow line. According to the plan, there will be a joint processing and export solution.
Svalin C was discovered in 1992, and production is scheduled to start in June 2014. Svalin M was discovered in 2008, and production start is scheduled for November 2013.
"Last week the NPD received the PDO for Bøyla, and this week we have received the PDO for Svalin. Both are good examples of minor developments phased into the existing infrastructure. This contributes to good area solutions, as well as good utilisation of infrastructure, both of which are important to the NDP", says Kjetil Aasoldsen, Director of North Sea South in the Norwegian Petroleum Directorate.
The licensees in the coordinated Grane field, where Statoil is the operator, own the facilities.
According to plan, the Svalin oil will be transported together with Grane's own production in the existing pipeline from Grane for storage and shipment from the oil terminal at Sture. The gas compression installation on Grane will be modified to be able to process gas from Svalin. The metering installation will also be upgraded.
The licensees expect the field to continue production up to 2030.
Plans for development and operation (PDO) and plans for installation and operation (PIO) comprise a development or construction section and an impact assessment section. PDOs/PIOs must be submitted to the MPE and the Ministry of Labour (AD) with a copy to the NPD and the Petroleum Safety Authority Norway (PSA).
For PIOs for gas transport and processing, or PDOs including processing of gas transport in pipelines, Gassco must also receive
a copy. The MPE coordinates the processing of the plan. AD, NPD and, if relevant, Gassco will submit their assessments to
the MPE, while the PSA submits its assessment to AD.
Source: Nortrade, 21.6.2012
Immigrants to be issued new residence cards
Foreign citizens living in Norway will no longer get a sticker in their passports to indicate legal, permanent residence.
Instead, reports newspaper Aftenposten, they’ll now be issued plastic cards that they must carry along with the passports
when traveling abroad.
All foreign residents from countries outside the European Economic Area need to document their permanent residence, and also have to renew the documentation every other year. Starting late last month, the documentation now comes in the form of the cards that resemble a bank ID card and verify what the Norwegians call oppholdstillatelse.
The change reportedly means the foreign residents no longer will need to make a trip down to the local police office that enforces immigration policies. They’ll be able to order the cards and have them delivered in the mail.
“The cards are proof that someone has the right to live in Norway,” Karl Erik Sjøholt of immigration agency UDI told Aftenposten.
Cards can only be ordered upon expiration of the stickers now in passports.
Source: Views and News staff, 21.6.2012
Borrowers avoid interest rate hike
Norway’s central bank board has ignored some economists’ calls for a hike in interest rates. Just a day after even Prime Minister
Jens Stoltenberg worried that Norwegians have too much debt, the bank nonetheless kept interest rates low on Wednesday, at
their last meeting before the summer holidays set in.
It was no big surprise, really. The deputy chief of the board of Norges Bank, Jan Fredrik Qvigstad, had said after the last board meeting in May, when they also resisted raising rates, that he and his colleagues expected interest rates to “remain unchanged throughout the year.”
On Wednesday, his boss, central bank chief Øystein Olsen, followed up by announcing that the bank’s key policy rate would remain unchanged at 1.5 percent. That’s an historically low level, in place for the past few months, and some economists have suggested rates should rise to slow down the pace of borrowing. Olsen and his colleagues clearly disagreed.
Even though they conceded that economic development in Norway has been “slightly stronger than expected,” Olsen said that the turbulence and weak growth prospects abroad “suggest the key policy rate should be kept on hold.”
Øystein Dørum, chief economist at Norway’s biggest bank, DNB, equated it to “sitting still in the boat during turbulent times.” In line with Qvigstad’s comment last month, Dørum told Norwegian Broadcasting (NRK) that he expects interest rates will stay low. “The reason is that the world around us is uncertain,” Dørum said. “There’s a danger the debt crisis will accelerate.” That can make life more difficult for Norwegian business and industry.
Good times still rolling, for now…
Life otherwise continues to be far from difficult for most Norwegians, as the country’s oil-driven economy keeps growing,
pay keeps rising and many are heading off on holidays while millions of Europeans head for the unemployment office. That worries
Stoltenberg, who suggested at a traditional pre-summer meeting with reporters on Tuesday that times are almost too good in
the country he’s led for the past seven years.
“I’m afraid that folks think that because we have oil, things will go well regardless,” Stoltenberg said. “We see the crises around us, in Spain, Greece, Portugal, Ireland … I’d like to remind everyone that our nearest neighbours, Sweden, Finland and Denmark, now have unemployment rates of 7-8 percent. Some of them have had to make tough budget cuts. So this is around us, it’s close, and the most important thing we can do is keep order in our own economy.”
Stoltenberg told NRK that he’s worried about high and rising household debt in Norway, where a tight housing market and strong demand have sent prices, and mortgage levels, soaring. The economists who urged higher interest rates an increase in rates as a tool for reducing loan demand, and overall debt.
That didn’t happen and rates now look likely to remain at historically low levels at least through the summer. Other current
key figures in Norway, according to the state statistics bureau SSB, include an unemployment rate of 3 percent (compared to
10.8 percent in Europe and 21.1 percent in Greece), growth in first-quarter GNP of 1.1 percent (negative, -0.2 percent in
Europe) and an inflation rate of 0.5 percent (2.4 percent in the euro zone).
Source: Views and News from Norway/Nina Berglund, 20.6.2012
New butter woes spread cost cut calls
Norway’s two largest non-socialist parties, the Conservatives (Høyre) and the Progress Party (Fremskrittspartiet, Frp), think
it’s possible to cut billions in state funding for agriculture, by reducing the bureaucracy that protects Norwegian farming
and by promoting more free-market mechanisms. Their proposals come amidst complaints of high food prices and another possible
butter shortage.
Norwegian Broadcasting (NRK) led off some morning newscasts on Tuesday with reports that state dairy cooperative Tine hasn’t been able to fill all orders for butter products in recent weeks. Grocery store officials in the large Coop and Norges Gruppen chains complained they once again weren’t able to keep their shelves filled with a complete product line.
No one expects another round of the acute butter shortage that occurred last fall and winter, when stores were empty of all butter after Tine, the so-called “market regulator,” had miscalculated domestic production. But NRK reported there is still a relatively severe shortage of the milk production needed to meet all butter market demand.
Tine’s powerful position in the market has been a matter of debate for months, as it has tried to salvage its tarnished reputation. Tine chairman Trond Reierstad has admitted he never imagined an issue like the butter “crisis” could occur and that he and other Tine officials handled it poorly. The cooperative that controls around 80 percent of the market has been advertising for another new communications adviser while its communications chief continues to fend off sour consumers.
Retired lawyer Olav E Klingenberg, for example, criticized Tine last month for taking the largest share of the price of a liter of milk, around NOK 15. While the farmer gets less than NOK 5 per liter and the retailer around NOK 1-2, and NOK 2 goes to VAT, Tine takes the rest to cover its costs.
Lars Galtung of Tine objected, denying Tine has a monopoly and claiming that Tine only took NOK 4 to cover its costs of transporting, packaging and marketing the milk plus another NOK 2 to cover a state tax. In doing so, though, Tine’s defense shows that it gets more than the farmer and that the much-criticized retailers get the least.
Conservative politicians started issuing calls to rein in Tine last spring, saying its behaviour and operations had actually hurt the reputation of the farmers it serves and that it had far too much power both as a producer of dairy products and a market regulator that sets the premises for competition. Tine earlier has been criticized for its response to competition from both Q-dairies and Synnøve Finden, while others question why a liter of milk in Denmark costs the equivalent of NOK 8.11 and just NOK 5.50 in Sweden, a third of the Norwegian price. Danish farmers, meanwhile, have complained bitterly over a proposal from Tine last spring to boost tariffs on imported cheese. “Norwegian farmers are content with having just 10 cows, but they still want to drive Mercedes,” Kristian Svendsen of the Danish farmers’ organization told news bureau Berlingske.
Now both the Conservatives and the Progress Party, which have been leading voter polls lately, agree on reductions in funding for agricultural protectionism in Norway. They’re urging adaptation to lower levels of import tariffs and a general restructuring aimed at bringing prices down.
Their measures came in their response to the left-center government’s subsidy package for farmers, which was angrily rejected by the farmers as being too low. Farming lobbyists were, not surprisingly, upset by the non-socialist parties’ ideas for tackling the ongoing debate over food prices in Norway.
“If we’re to have European price levels with our cost levels, the consequences will be dramatic,” claimed Nils T Bjørke of the national farm lobby group Bondelaget. He was furious with the government parties last month, but doesn’t embrace the conservatives’ ideas either.
Synnøve Finden’s chief executive, Lars Tretteteig, meanwhile, has called for a full evaluation of the milk (and thus butter) market in Norway, “in full openness.” Torgeir Trældal of the Progress Party wants to attract farmers as voters, but urges the farmers to “dare to start thinking new,” in a steadily more international market.
“I think the farmers would win more support among folks, if they demanded more commercial market freedom, instead of more
state funding in their paychecks,” Trældal recently told news bureau ANB.
Source: Views and News from Norway/Nina Berglund, 19.6.2012
Air traffic controllers threaten strike
Norwegian airports may once again be hit by disruption if air traffic controllers go through with a threatened strike late
next week. A strike would force a major reduction in take-offs and landings all over the country.
Newspaper Stavanger Aftenbladet reports that negotiations broke down between the labour organization representing air traffic controllers (Norsk Flygelederforening, NFF) and employers’ organization Spekter. It’s representing the aviation authority Avinor, which runs Norway’s airports.
Pay dispute
The breakdown in talks reportedly was based on disagreement over pay raises. The air traffic controllers rejected an offer
that was similar to those accepted by other Avinor employees organized in unions tied to national labour federation LO.
“It’s unfortunate that we didn’t manage to agree, despite an offer with the same framework made to other employee groups in Avinor,” said the negotiations leader for Spekter, Anne-Kari Bratten.
NRR chairman Robert Gjønnes confirmed on NFF’s website that negotiations broke down between NFF and Spekter “because of disagreement on the total (package), with emphasis on the social profile.” He declined further comment.
Mediator to take over
Now the dispute between the air traffic controllers and Avinor will head for mediation but it was unclear when that might
begin. Gunnar Larsen, communications director for Spekter, said it “normally” takes two weeks before mediation begins. Since
talks officialy broke down on June 14, mediation likely wouldn’t begin until June 28.
“The timing depends on when the mediator is available to meet the two sides,” Larsen told Aftenbladet.
If mediation doesn’t succeed, a strike could be called at the end of June or early July, right when many Norwegians take off on traditional summer holidays in July.
Sudden rise in sick leave
There already have been some delays in airline traffic blamed on a sudden rise in the number of air traffic controllers calling
in sick to their station at Røyken in Buskerud. It serves as the main control base for eastern Norway, and subsequent delays
especially affected travel to and from Oslo’s main airport at Gardermoen late last week. Airports between Molde and Haugesund
were also affected.
Bratten of Spektrum said the employers’ organization had no evidence the rise in sick leave was connected to the unsuccessful negotiations. She said she expected the air traffic controllers to adhere to rules governing labour negotiations.
Traffic through Norwegian airports was disrupted earlier this month when security guards walked off the job, also in a dispute
over pay. They were eventually ordered back to work by the Norwegian labour minister after a week of long lines at security
checkpoints and the forced closure of some airports.
Source: Views and News from Norway/Nina Berglund, 19.6.2012
Changes in the Government
In today’s session of the Council of State, the King has appointed Ms. Marit Arnstad, lawyer, Skatval, as Minister of Transport
and Communications, and Mr. Trygve Slagsvold Vedum, Member of Parliament, Ilseng, as Minister of Agriculture and Food.
At the same time Ministers Magnhild Meltveit Kleppa and Lars Peder Brekk have been honourably discharged from their offices.
The Government represents the Labour Party (Lab.), the Socialist Left Party (Soc.) and the Centre Party (Cent.). The government list is now as follows:
| Prime Minister: | Mr. Jens Stoltenberg (Lab.) |
| Minister of the Environment: | Mr. Bård Vegar Solhjell (Soc.) |
| Minister of Local Government and Regional Development |
Ms. Liv Signe Navarsete (Cent.) |
| Minister of Foreign Affairs | Mr. Jonas Gahr Støre (Lab.) |
| Minister of Justice and Emergency Planning |
Ms. Grete Faremo (Lab.) |
| Minister of Finance | Mr. Sigbjørn Johnsen (Lab.) |
| Minister of Trade and Industry | Mr. Trond Giske (Lab.) |
| Minister of Health and Care Services | Ms. Anne-Grete Strøm-Erichsen (Lab.) |
| Minister of Education and Research | Ms. Kristin Halvorsen (Soc.) |
| Minister at the Office of the Prime Minister | Mr. Karl Eirik Schjøtt-Pedersen (Lab.) |
| Minister of Culture | Ms. Anniken Huitfeldt (Lab.) |
| Minister of Government Administration, Reform and Church Affairs Also Minister for Nordic cooperation. |
Ms. Rigmor Aasrud (Lab.) |
| Minister of Labour | Ms. Hanne Bjurstrøm (Lab.) |
| Minister of Fisheries and Coastal Affairs | Ms. Lisbeth Berg-Hansen (Lab.) |
| Minister of Transport and Communications | Ms. Marit Arnstad (Cent.) |
| Minister of Petroleum and Energy | Mr. Ola Borten Moe (Cent.) |
| Minister of Defence | Mr. Espen Barth Eide (Lab.) |
| Minister of International Development | Mr. Heikki Holmås (Soc.) |
| Minister of Children, Equality and Social Inclusion | Ms. Inga Marte Thorkildsen (Soc.) |
| Minister of Agriculture and Food | Mr. Trygve Slagsvold Vedum (Cent.) |
Source: Office of the Prime Minister, 18.6.2012
Real estate prices continue to increase
Interest rates have been low for several years, and is one of the main reasons why real estate prices will continue to increase.
Although several analytics think the borrowing rate will go up soon, head economist in Terra Jan L. Andreassen thinks Norway
is far from an increase. "Today's low interest rates will continue in the foreseeable future, also in Norway," he says.
According to Andreassen, mortgage rates are unlikely to rise in upcoming years. "The banks' loss on mortgages are currently so low that it would be difficult for the banks to maintain their margins," Andreassen explains. "Interest rates should and will be cut in Europe. We are in a recession now, and the interest rate should be as close to zero as it can get until we've achieved a solid and long-lasting upswing." He thinks an increase is unlikely before 2015-2016.
On the real estate market, there is a combination of imported labor and falling interest rates, which boosts property prices. Even in the case of lower salaries the next few years, the average household will still experience an increase in income of 4,5 percent per year.
On the downside, Andreassen says, there could be a risk for falling oil prices. If the price of oil decreases, the public
sector won't be able to afford the rise in wages, which again would lead to a decrease in household incomes and lower real
estate prices.
Source: The Norway Post, 18.6.2012
Porsgrunn porcelain factory may shut down
The traditional, Norwegian porcelain factory Porsgrunn will most likely have to close as a result of poor sales and a loss
of NOK 3,5 million.
Owner Atle Brynestad has called all 35 employees into a meeting on Monday. If the factory closes, all manufacturing and product sale of the famous designs will be terminated.
So will a long history of tradition; Porsgrunn porcelain factory was founded in Porsgrunn in 1885, on the south-coast of Norway. For more than 125 years, the factory has produced high-quality china, with inspiration and designs from several well-known artists.
Union representative Dag Augestad does not want to make any statements to the press before Monday. Manager of sales and operations,
Helena Teigen also refused to comment on the information.
Source: The Norway Post, 18.6.2012
