MNI BRIEF: Norges Bank Survey Finds 2024 Wage Expectations Up

Norges Bank's latest quarterly business survey, published ahead of next week's policy decision, found capacity constraints easing, employment continuing to rise and firms nudging up their expectations for wage growth next year.

In the third quarter survey firms' wage expectations for this year were unchanged at 5.4 per cent but for 2024 rose to 4.6% from 4.4%. The oil sector, boosted by higher prices, anticipated the sharpest wage rises in 2024 of 5.1% and the energy sector was also more upbeat about the activity outlook with an increased willingness to invest in oil and gas extraction.

Overall employment is expected to grow despite easing capacity pressures and firms' predictions that while economic activity would expand in the third quarter that it would ease back in the fourth, with firms saying they were willing to hoard labour to avoid the risk of struggling to replace skilled staff in future.

Norges Bank raised its policy rate by 25 bps in August and signaled another hike this month and the survey is unlikely to deter a 0.25 percentage point rise next Thursday.