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Norway - Challenges for the agency work industry

03 September 2015

The Norwegian agency work market is declining for the 10th consecutive quarter and the yearly development is the worst seen since the financial crisis in 2009. The quarterly figures from the Norwegian Federation of Service Industries (NHO Service) shows that a challenging labour market is affecting the staffing industry.

The decline, from the second quarter in 2014, is the heaviest since 2009 but it is not as severe as during the financial crisis. However, in the course of 3 years there has been a gradual weakening of the agency work market in Norway. In the beginning, the main reason for the decline was new regulation that lifted the price of agency workers. Then, as the market began to stabilise, the oil prices began falling and the Norwegian economy cooled down. The decline in the agency work sector continued, resulting in 10 consecutive quarters with downturn. 

The agency work industry is a mirror of the evolution of the Norwegian economy as it responds to variation in demand and changes in cyclical trends.  The companies are therefore used to adapt to changing times.  However, some of the challenges in the Norwegian economy include the highest unemployment since 2009; an unstable stock exchange; and a heavy decline in the agency work sector.

While the decline in work hours is 8.8%, sales revenue is down 8.6%. Adjusted for inflation the average prices were lower in Q2 than the previous year.

There are also regional differences and the biggest challenges lie in Western Norway where the downturn in the oil industry has had a big impact on the local labour market. 

Several work areas are now facing heavy decline: Manufacturing (-26.9%), Office/administration (-22.4%), Engineering (-20.6%), Hospitality (-14%) and Construction work (-14%).

These statistics show that the labour market in Norway has become substantially more challenging during the first six months of 2015, and that the agency work industry continues to be affected by it.