Economy: Pessimism prevails among Norwegians

Oil platform, trade surplusOil platform.Photo

Not since the crisis at the beginning 1990s have Norwegians expectations concerning economic developments have been as low as they have been in this quarter and the previous quarter.

This is reveled in Finance Norway’s expectation barometer, which will be presented on Wednesday.
– The main indicator in this quarter is the third lowest ever recorded in the history of this survey. The last time where people had an even more bleak outlook than they do now was at the banking and housing crisis in the early 1990s, according to Finance Norway.
Ever since 1992, the main organization for the financial industry in Norway has, in cooperation with TNS Gallup measured the expectations for the economic situation and outlook of Norwegians.

The main impression from the survey for the second quarter is that Norwegians are still pessimistic. At the same time, people seem to be much less pessimistic about the national economy than they are about their own economy .
– A weaker exchange rate and expansionary economic policy has to some extent offset cuts in investment and staffing in oil-related businesses. This has lead to a greater faith in the country’s economy, says CEO Idar Kreutzer in Finance Norway.
But when it comes to Norwegians’ belief in their own economy, the picture is different.
– At the same time the barometer shows that households are somewhat more uncertain about their own financial situation, says Kreutzer.

Weak growth – increased unemployment
At the moment Norwegian economy is faced with several challenges.
The oil prices have dropped from $ 115 a barrel in summer 2014 to $ 44 a barrel today. Along with an expected decline in petroleum investment, this has lead to a big downturn for  the oil and gas industry and also for companies that are suppliers for the oil and gas industry, in Southern and Western Norway.
This has resulted in sluggish growth and a continual rise in unemployment  for two years. 4.6 percent are now without work, according to recent SSB numbers.
– The latest quarterly report of NHO shows that falling oil investments now are also felt in the other parts of Norway, not just in the Southwest region. For instance, we now see more of the negative market outlook experienced by businesses in Western Norway in Oslo and Akershus, says Kreutzer.


Source: NTB scanpix / Norway Today