March 19, 2018 / 10:52 AM / a year ago

UPDATE 1-Norway's retailers see lower growth in sales

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OSLO, March 19 (Reuters) - Norwegian retail sales will probably grow by 3.0 percent on a nominal basis in 2018, below a September forecast of 4.0 percent but up from 2.5 percent in 2017, the Enterprise Federation of Norway, also known as Virke, predicted on Monday.

The forecasts, measuring the value of all sales, are not adjusted for inflation. Statistics Norway expects core inflation of 1.7 percent in 2018.

Less expansionary fiscal and monetary policies, along with weaker housing investments, were among the factors curbing growth this year, while somewhat higher wage growth would be supportive.

“We see cautious optimism among the industries we represent,” Chief Executive Vibeke Hammer Madsen said, but added that Virke continues to worry over a drop in Norway’s rate of employment, which indicates that more people leave the work force.

A total of 69.7 percent of adults are currently employed or seeking employment, Statistics Norway data show, down from 71.4 percent two years ago.

In an annual survey by Virke, 26 percent of member firms expected to increase the number of employees during the next six months, the highest level since the survey began in 2012 and up from 23 percent last year.

“People have understood that the economy is improving and volumes are rising, although prices are not keeping up due to tough competition,” Virke’s chief economist Lars Haartveit told Reuters.

The share of respondents that expect unchanged employment fell to 64 percent from 67 percent, while the level of businesses that planned to downsize was unchanged at 10 percent. (Reporting by Camilla Knudsen, editing by Terje Solsvik)

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