NORWAY
The revised national accounts data (also incorporating the Q3 figures) paints a somewhat rosier picture for Norwegian productivity than previously thought. Mainland hours worked rose 0.1% Q/Q in Q3, implying real productivity per hour growth of 0.4% Q/Q for the second consecutive quarter. On net, this could be considered a dovish input for the Norges Bank, as stronger productivity growth puts downward pressure on unit labour costs. Overall employment growth was 0.2% Q/Q, in line with the Q3 Regional Network Survey expectations.
- However, overall compensation growth remains strong, which provides some offset to the stronger productivity developments. Total compensation per employee rose 5.3% Y/Y in Q3. This is a touch higher than the 5.2% Q3 average monthly basic earnings growth from the quarterly labour force survey and Norges Bank’s forecast for 2024 wage growth.
- Norges Bank expects wage growth to ease to 4.3% Y/Y in 2025, which should support a steady rate cutting cycle. As always, focus will be on the labour union negotiations in the first quarter of next year.
- Looking at the 2022 revisions: Annual hours worked growth was revised 0.4pp lower to 3.5% Y/Y, which implied a 0.5pp increase in mainland productivity (which was still negative at -0.2% Y/Y).
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