Norwegian companies are anxious about the future, new report finds

The corona measures have led to a flattening of business activity for Norwegian companies. 

The developments were revealed in the quarterly report to Norges Bank by the Regional Network, where 300 business leaders and organizations were interviewed about financial prospects.

“The companies believe that activity will remain unchanged in the next six months, but they are very uncertain about future developments. Much will depend on the infection rates and current infection control measures in society,” the report noted.

Fewer employees needed

The recent weak rise in employment may be a temporary trend. The companies believe they will need slightly fewer employees in the next three months.

Now they are preparing for new rounds of layoffs and redundancies.

“Both in construction, the oil supplier industry, and in the municipal and hospital sector, a decline in employment is expected,” the report warns.

The report was published a week before the interest rate meeting at Norges Bank, and it is an important part of the decision basis for Norges Bank’s Executive Board.

Furthermore, the report points out that the construction of private commercial buildings has almost stopped. 

Buildings in the process of being constructed will be completed, but few new ones will be built.

Surprised by pessimism

Chief economist Frank Jullum at Danske Bank is a little surprised that companies have become more pessimistic since the previous survey in August.

“The details show higher optimism in all sectors with the exception of services to households, which are hardest hit by the new infection control rules, and a little more surprisingly also in construction and services to businesses,” he noted.

The interviewees expect a wage increase of 1.9% this year and 2.4% next year. 

© NTB Scanpix / #Norway Today