Norwegian wage settlements in 2010

The Norwegian Technical Calculation Committee for Wage Settlements presents the preliminary report on the basis for wage settlements in 2010.

This Committee's preliminary report for 2010 outlines recent years’ developments in pay, earnings, prices and competitiveness. The Committee also presents a projection of consumer price growth from 2009 to 2010 and briefly describes prospects for the international economy and the Norwegian economy. The report is based partly on preliminary figures and estimates for 2009. Parts of the report will therefore be updated towards the end of March. The updated report will be published as an Official Norwegian Report.

Main points of the report
Average pay growth from 2008 to 2009 is estimated at 4.1 per cent compared with 6.3 per cent in 2008. Pay growth in 2009 varied between 1¾ per cent and 4¾ per cent in the major bargaining areas apart from financial services where pay growth was ½ per cent. The low pay growth in financial services is due to clearly lower bonus payments than in the preceding year. The pay trend in 2009 in some areas is heavily affected by factors other than ordinary pay increases. This is the case for firms affiliated to the Federation of Norwegian Commercial and Service Enterprises (Handels- og Servicenæringens Hovedorganisasjon, HSH) in wholesale and retail trade, where such factors pushed down pay growth sharply.

The wage carry-over into 2010 is estimated to average 1¼ per cent, about 1 percentage point higher than into 2009. The wage carry-over into 2010 varies from ½ per cent for employees in the central government sector to 1½ per cent for non-manual employees at manufacturing firms affiliated to the Confederation of Norwegian Enterprise (Næringslivets Hovedorganisasjon, NHO).

Growth in executive pay in 2009 in industries for which pay statistics are available was in several industries lower than for wage earners in general. For managing directors and others with managerial functions in the financial industry, average pay fell by 17.6 per cent in 2009 compared with growth of as much as 28.6 per cent in 2008. Bonuses are included in these figures, whereas options and benefits in kind are not included.

Real after-tax pay for wage earners as a whole increased by 2.1 per cent from 2008 to 2009, compared with 2.3 per cent the previous year. The lower pay growth in 2009 compared with 2008 was offset by lower price growth.

The Committee estimates an average consumer price growth of 1½ to 2 per cent from 2009 to 2010. The figure for 2009 was 2.1 per cent. The uncertainty in the price growth estimate for 2010 relates above all to energy prices and the krone exchange rate.

Cost competitiveness in manufacturing, measured by relative hourly wage costs in a common currency, has weakened over the past years. From 2008 to 2009 the growth in hourly wage costs in Norway was in line with cost growth among our trading partners. However, an average depreciation of the Norwegian currency from 2008 to 2009 meant that wage costs in Norway measured in a common currency rose less than among our trading partners.

Average hourly wage costs in manufacturing in Norway in 2009 were an estimated 23 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 46 per cent higher than among Norway’s trading partners.

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