Norwegian industrial workers at companies including Aker Solutions ASA agreed to a new collective bargaining deal on wages, averting a strike that threatened to curb Norway’s sluggish economy.
The parties agreed to a general wage increase of 0.75 krone and to discuss an accord on pensions by the end of 2015, according Stein Lier-Hansen, head of the Federation of Norwegian Industries. The increase will mean an overall rise in wages of about 3.3 percent, he said.
“It was more expensive than I had hoped for, but it’s an accord that I can accept,” said Lier-Hansen.
The accord with unions, including the United Federation of Trade Unions, covers about 33,000 private sector workers. The deal sets a benchmark for broader talks this year between another 600,000 unionized workers and the 85,000 companies in the Confederation of Norwegian Enterprise.
Workers in Norway are seeking more of the country’s oil riches as Europe emerges from recession. Backed by an $850 billion sovereign wealth fund, wages in Norway last year were 55 percent higher than the average of its trading partners, according to a government study released in February.
“It’s very early in the process and negotiations in the dominant public sector are yet to start in earnest, but the agreement suggests that economy-wide wage inflation might slow from 3.9 percent to 3.5 percent,” said Stein Bruun, chief economist at SEB AB in Oslo, in a note. This “would be the slowest rate since 2005 and as expected by Norges Bank among others,” he said.
Norwegian manufacturing wages have risen 4.2 percent on average since 2004, compared with a 2.8 percent increase for its main trading partners, according to the government study.
Exporters including Norsk Hydro ASA have struggled to adapt to the appreciation of the krone. Though the currency has eased 10 percent against the euro since the start of last year, it’s still 28 percent overvalued, according to a gauge of purchasing power by the Organization for Economic Cooperation and Development.
The government sees unemployment rising to 3.75 percent next year while the euro-area average is about 11.9 percent. Norway’s $500 billion economy grew 2 percent in 2013 after expanding 3.4 percent in 2012. Norges Bank last week cut its growth forecast for 2014 to 1.75 percent from 2 percent estimated in December.