New statistics for the manufacturing sector, where employment has developed very weakly since the start of the crisis, also show that employment is increasing and that companies are planning for further new recruitment. We expect employment to continue to grow relatively strongly over the coming years (see Figure 7). Unemployment is now decreasing rapidly. It has fallen by over one percentage point over the last year. Our assessment is that unemployment will continue to decrease towards just over 6 per cent by 2013 (see Figure 8). BIS central bankers’ speeches  5  CPI inflation is presently unusually high. This is primarily connected with the circumstance that we are now in a phase in which interest rates are being increased. Mortgage rates are included in the CPI and they are increasing at the same rate as the Riksbank raises the repo rate – or, recently, even slightly faster. We expect CPI inflation to remain high in the years ahead (see Figure 9).2 CPIF inflation (the CPI with a fixed interest rate) provides a better view of underlying inflationary pressures and shows that inflation is currently low. The effect of rising energy prices on inflation has so far been counteracted by the strengthening of the krona. However, the main reason for the low rate of inflation is the weak development of unit labour costs. Productivity has increased rapidly at the same time as the rate of increase in hourly wages has been low.
Another problem was that Teknikföretagen, an employers’ organisation in the engineering industry, revoked the Industrial Agreement last year. The Industrial Agreement is an important reason that wage formation has worked so well since the mid-1990s. The revocation of this Agreement by one of the signatories meant that the future of the Agreement became uncertain. This has been sorted out now, with a new proposed Industrial Agreement having been accepted by all parties except the Swedish Paper Workers’ Union. I view the new Industrial Agreement as a success. It cements the principle that the parts of the business sector that are exposed to international competition should play a normative role in wage bargaining and gives the impartial chairmen a stronger role in the coordination within the manufacturing sector. It is thus positive that there is a new Industrial Agreement. But there is reason to remind ourselves of our experiences from the wage bargaining rounds in 1995. The coordination of the demands from the Swedish Trade Union Confederation failed in these wage bargaining rounds. The Swedish Paper Workers’ Union and the Employers’ Federation of Swedish Forest Industries were first out then, and concluded a relatively high agreement that set the level for a large part of the labour market. The result of this was wage increases of over 5 per cent in the years 1996 and 1997, levels which were altogether too high in relation to the inflation target and the weak employment situation.