New report: record high job gains in Gothenburg

New building under construction in Gothenburg

Economic activity remains high in the Gothenburg region. The number of advertised job vacancies is at an all-time high and employment continues to grow. The situation for exports and forecasts for key markets remain positive, although the war in Europe is a cause for concern and can worsen the situation. These were some of the findings of Business Region Göteborg's first Economic Outlook report of 2022. 

Despite the crisis in Ukraine, optimism remains high within all major sectors in the Gothenburg region. While the situation within commerce, services and construction has slowed down slightly, manufacturing has strengthened. The overall economic tendency indicator for the fourth quarter of 2021 was 112, which indicates a boom situation – and for the third consecutive quarter.  

Stable economic growth is expected in Sweden as well as in Gothenburg’s key export markets. In the US, the region’s largest market, the GDP is expected to grow 3.8% this year. Meanwhile, the Eurozone expects 4.0% growth, while the forecast for China is 5.0%.  The export weight for GDP growth for the region’s 10 largest markets is 3.8%. The GDP growth forecast for Sweden is 3.4% during 2022.

Low levels of trade with Russia

The GDP forecasts from IMF, OECD and the Swedish banks were made before Russia invaded Ukraine. It is likely that they will be revised somewhat in the near future. The concerns are not related to Russia’s direct significance for the region’s trade, but rather the disruptions the war may cause, for example, to the production of input goods in Germany which are vital for the Gothenburg region’s export companies. During 2020, Russia accounted for around 1% of the Västra Götaland County’s exports by value and 0.3% of its imports. 

“Our trade with Russia has decreased over time and is too small to have a direct impact on the Gothenburg region’s economy.  But rising energy prices and inflation as well as disruptions in our supply chain can impact the situation for companies – but to what extent is difficult to say at this moment. Germany is the country we import most from,” says Peter Warda, senior analyst at Business Region Göteborg. 

“At the same time, the economic forecasts are very positive. We have left the pandemic behind us. Demand is growing strongly is many areas, not in the least within retail and hospitality,” he adds.

The restrictions during the winter hampered the tempo of recovery within retail somewhat and the economic tendency indicator suggested a normal-strong situation. The same situation was seen in the services sector. Meanwhile, demand, profitability and employment in both sectors increased during the fourth quarter of 2021. This trend is expected to continue during the first quarter of 2022, with services companies particularly optimistic.

Record high job gains

For Sweden as a whole, job growth rose within the manufacturing and construction sectors during the fourth quarter of 2021 and is expected to continue growing during early 2022.

Job vacancies in the region have grown dramatically with an average of 10,600 new vacancies per month during the period December 2021 to February 2022. This is the highest number seen since 1993. Many more jobs are expected to be created in the Gothenburg region during the next few years. 

Logistics company Budbee is building a new warehouse and is expecting to hire 400 new people. Klarna is establishing a new development hub in the city and will hire 500 people, while Volvo Cars and Northvolt will employ a few hundred developers at their new battery R&D centre. Their joint production plant, which will be established in Gothenburg and operational in 2025, will create 3,000 direct jobs.

Unemployment continues to decrease and is lower than for Sweden as a whole. The unemployment rate was 6.1% in the Gothenburg region in February (-1.7%-points year-on-year). In comparison, the unemployment rate in February was 6.7% in the Stockholm region, 9.5% in the Malmö region and 7.2% for Sweden as a whole. 

Guest nights rebound to a high level

The hospitality sector continues to show clear improvements. The number of guest nights improved significantly with 366,000 guest nights per month during the fourth quarter of 2021. This is higher than the corresponding figure for the period 2015-2019 (358,000 guest nights per month). 
Meanwhile, the number of air passengers to and from the region is also on the rise. Between December 2021 and February 2022, Göteborg Landvetter Airport reported just over 200,000 passengers per month. This is much higher than in the previous year, but well below the volumes seen pre-pandemic.

“It's great to see that the situation in the hospitality sector is improving. Before the pandemic, foreign guests accounted for many of the guest nights, but today we see that its domestic visitors who are contributing most to this strong recovery,” says Peter Warda.