Registered unemployment was 2.3 per cent of the labour force in October. Unemployment has declined for all occupational groups, and has been most pronounced in manufacturing, building and construction and the engineering and ICT sectors. There are probably limitations to how much the supply of Norwegian labour can increase in the period ahead. Labour participation rates are high, particularly when taking into account demographic developments. Developments in the labour market are similar to those observed prior to the period of accelerating wage and cost inflation that started in 1998, but wage growth so far has been fairly moderate. Several factors may have contributed to this. An increase in inward labour migration and the opportunities provided by an international labour market may have prompted participants in local and centralised wage negotiations to place greater emphasis on the considerably higher wage level in Norway relative to our trading partners and on potential job vulnerability. Foreign companies with contracts in Norway account for a substantial share of inward labour migration. Labour inflows from the new EU member states still appear to be growing, with the construction industry absorbing a particularly large share. In 2006, the number of persons employed  BIS Review 108/2006  1  from new EU member states who are not resident in Norway is estimated at close to 30 000, i.e. an increase of 12,000 since 2005. Inward labour migration has reduced bottlenecks in some industries. However, despite increased labour market flexibility, the risk of higher growth in labour costs is now rising.
In the course of 2005, office rental prices began to pick up in the largest Norwegian cities, with considerable variation within the various quality and location segments. The rise in consumer prices has also edged up since the beginning of the cyclical upturn. The year-onyear rise in the consumer price index (CPI) was 2.6 per cent in September. Energy products such as electricity and oil have put upward pressure on inflation over the past year. Electricity prices, including grid rent and taxes, were 48 per cent higher in August than one year earlier, while petrol prices were 1 per cent higher. Since the beginning of 2001, the rise in energy prices has been over 7 per cent on average. Variations in energy prices may also lead to wide monthly variations in consumer price inflation. As a result of high electricity prices, the rise in CPI inflation will remain steady though 2006. Energy prices are expected to fall in the spring of 2007, dampening the rise in CPI inflation. The rise in prices for non-energy goods has been moderate in recent years. Price impulses from imported consumer goods have been particularly weak. Their contribution to inflation has been negative virtually every year since the mid-1990s, partly reflecting increased trade, a shift in imports towards low-cost countries and a substantial improvement in distribution efficiency in Norway. Price impulses from imported consumer goods are expected to continue to exert downward pressure on inflation for some time ahead, albeit to a lesser extent than in previous years.