period of time. chart : us, euro area and swedish interest rates short - term interest rates have been on the rise in the us for some time, after the federal reserve began to raise the policy rate towards the end of 2015. in the euro area, the policy rate has been negative since 2014, with the latest reduction made by the european central bank ( ecb ) in march 2016. market participants expect the first policy rate rise in the euro area to occur in the course of next year. the ecb is purchasing bonds in the market to stimulate activity and boost inflation, but has now begun to reduce the pace of its purchases. the policy rate in sweden is also negative, with the latest reduction made in february 2016. the swedish 1 / 4 bis central bankers'speeches riksbank ’ s forecast indicates that the first policy rate increase will occur next year. chart : oil prices oil prices gradually rose through 2016 and have in recent months hovered around usd 50 per barrel. futures prices indicate that oil prices will remain close to today ’ s level in the years ahead. oil prices have almost doubled since reaching their lowest level in early 2016, but are nonetheless less than half the level recorded before the steep fall in oil prices in summer 2014. petroleum investment has declined markedly compared with the 2013 level. lower oil industry demand has affected the wider economy. last year, growth in mainland gdp was at its lowest since the financial crisis. chart : unemployment unemployment increased through 2015 and to some extent in 2016, particularly in southern and western norway. so far this year, the labour market has improved and unemployment has fallen. monetary policy supports the necessary restructuring of the norwegian economy. the key policy rate is low and the krone depreciated in pace with the fall in oil prices. combined with moderate wage settlements, the krone depreciation has contributed to a marked decline in relative labour costs, strengthening the position of norwegian firms exposed to international competition. chart : relative labour costs improved cost - competitiveness is an important factor in enabling new exports to emerge as the production of oil and gas dwindles. tourism in norway has risen markedly in recent years, and exports of traditional manufactured finished products have shown an appreciable increase. however, the increase is not sufficient to compensate for a decrease in exports from other sectors of the mainland economy. total mainland exports were lower last year than in 2014. the most important reason for this is the marked decrease in oil service industry exports in the wake of the

in norway. in recent years, we have also seen that many enterprises have moved large portions of their production abroad, particularly the most labour - intensive production. norwegian manufacturing companies could therefore remain profitable even if the size of the manufacturing sector in the norwegian economy is reduced. however, the scaling back of manufacturing also involves a risk. it makes the economy more vulnerable. the growth potential of the economy – the basis for learning, innovation and development – may be impaired when less of the business sector is exposed to intense foreign competition. over the last thirty years, manufacturing industry has been scaled back in waves. the sharpest declines were observed in the years between 1977 and 1984 and from 1987 to 1992. the declines were preceded by a deterioration in profitability in this industry. it may take time for a weakening to spill over to output and employment, but when the turnaround first occurs it takes place rapidly and on a large scale. primary industries, in contrast, are scaled back gradually. these developments will take place in addition to the effects associated with the increased spending of petroleum revenues. all in all, employment in manufacturing and agriculture may fall by some 50 000 - 100 000 person - years in the period to 2010. employment in the manufacturing sector may drop to below 250 000. in the agricultural sector, the number employed may be less than 50 000 person - years. changes in industry structure, with an increase in the number employed in services and a decrease in manufacturing, will probably reduce the role of pay increases in manufacturing as a benchmark for wage determination. wage formation and the labour market the structure of wage and income formation, the laws and rules governing the labour market and the social safety net are the main determinants of business costs and employment. if the cost level is too high, the business sector will find it unprofitable to employ everyone who wants to work. the business sector must restructure rapidly when real wages increase sharply. many activities will no longer be profitable and will be shut down. this could lead to higher unemployment. however, lower employment will not necessarily be reflected in unemployment figures. we may instead see a flow of discouraged workers into, for example, disability pensions, early retirement schemes or different types of adjustment packages. the extent to which these schemes are used will depend on financial incentives and entitlement thresholds. in many european countries unemployment has remained relatively high. by contrast, the us managed to reduce unemployment rapidly following the period of high unemployment early in the 1980s. the