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Economic Outlook: Hope for a lightening in the tunnel

25 March 2021
The real GDP growth is expected to rise in key markets, unemployment is declining as is the number of redundancies. When Business Region Göteborg presents this year's first Economic Outlook report, it is with the hope of a little lightening in the tunnel for the economy in the Gothenburg region. The situation, however, continues to be very difficult for the hospitality sector.

The current economic tendency shows that the region's companies remain in a normal weak position. During the last quarter of 2020, however, the tendency improved sharply - the economic indicator for the fourth quarter of 2020 stops at 97.5 for companies in the Gothenburg region and is well close to the next interval limit, between 99 and 101, which indicates an economic tendency that is 'normal'. 

– It is still difficult to say what magnitude the global development in 2021 will have on the Gothenburg region's business environment. However, a somewhat better situation awaits compared to what we saw last year. Our export weight for GDP growth in key markets shows an increased growth of 4.4 percent in 2021 and in 2022, the export weight remains at 3.4 percent. This, if anything, gives some hope for an improved situation for the region's business environment, says Peter Warda, Senior Analyst at Business Region Göteborg. 

UNEMPLOYMENT FALLS, YET FAR FROM FULL RECOVERY  

Generally, unemployment has risen sharply across the country during the Covid-19 pandemic, but in the most recent period we see that it slightly decreases. In March 2021, unemployment was at 7.8 per cent in the Gothenburg region (+1.5 percentage points on an annual basis). Just over 43,000 people are either unemployed or in labour market programmes. In the Stockholm region, unemployment was at 8.2 per cent (+ 1.5 percentage points on annual basis) and in the Malmö region it was 11.4 per cent (+ 1.6 percentage on annual basis). Unemployment in Sweden stops at 8.7 per cent (+ 1.1 percentage on an annual basis).  

- We continue to see that employment continues to decrease within the hospitality sector. These include transportation, hotels and restaurants, commerce and cultural and personal services, where sharp decreases have taken place during the year. What is most important is that available state financial support quickly reaches these companies so that both operations and employment can survive the pandemic, says Henrik Einarsson, Head of Establishment at Business Region Göteborg. 

THE LEVEL OF REDUNDANCIES IS LOWER THAN COMPARED TO THE TIME BEFORE THE PANDEMIC 

Last year, redundancies increased rapidly in the Gothenburg region, especially during the second quarter. During the period December 2020 to February 2021, however, the redundancies are lower than the time before the pandemic spread across the world. Despite recent developments, however, it is still too early to assess whether the redundancies will remain at this low level. 

NO INCREASE IN THE NUMBER OF BANKRUPTCIES 

Since the pandemic began in March 2020, 737 companies in the region have filed for bankruptcy up until February 2021. Compared to the same period the year before the pandemic, there is no increase at all in the number of bankruptcies (736). However, the companies that have gone bankrupt during the pandemic have had more employees than before.

 

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