Norway’s employers and the largest private-sector trade union clinched an agreement on wages with the help of the state mediator, averting a wide-ranging strike.
The Federation of Norwegian Industries reached a deal in overtime with the Fellesforbundet union for a wage increase of 5.2%, the union said in a statement. The central bank forecast annual wage growth of 4.9% this year in its March monetary policy report. Parat, a smaller union, hasn’t yet reached an agreement and will continue mediated talks, it said in a separate statement on Sunday.
The uncertainty regarding wage developments remains a key factor for Norwegian policymakers who last month signaled they will probably hold off cutting borrowing costs from a 16-year high of 4.5% until the autumn, most likely September.
The unions had sought increases in wages that would exceed price growth — projected at 4.1% by a government committee — after a decline in inflation-adjusted pay in the past two years.
The mainland economy, helped by a robust labor market, has remained more resilient in past months than expected, while a weak krone may also factor into delaying the first cut.
The two unions represent parts of the manufacturing industry exposed to international competition. In Norway, the outcome of these talks sets the starting point for wage negotiations in other sectors.
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