Sharp upturn in the Gothenburg economy

While the retail sector's very high expectations have softened somewhat, the overall picture across the regional economy has strengthened considerably. The economic tendency indicator for the fourth quarter rose to 107.4, indicating strong business activity. This is almost five points higher than the previous quarter and more than seven points higher than the same quarter last year. The improvement is both broad and substantial.

The wait is over for construction companies

For almost four years, construction companies in the Gothenburg region have perceived the economy as weak. Order books are finally growing again, albeit from low levels. Many companies were already reporting improved construction volumes in October, and a majority expect higher volumes and increased hiring next quarter. The turnaround came suddenly and is expected to continue. The sector's economic tendency indicator jumped by twelve points during the quarter.

“In just one quarter, the construction sector has gone from being a drag on the regional economy to becoming one of its key growth engines. This clearly demonstrates how different industries can take turns driving growth. This is particularly important now that we are seeing major cutbacks at Volvo Cars. The loss of 2,000 jobs in the passenger vehicle industry in the region implies that a further 3,600 jobs will disappear elsewhere in Sweden. That is how important the passenger vehicle industry is to Sweden,” says Henrik Einarsson, Head of Analysis and Director of Business Establishment and Investment, at Business Region Göteborg.

Across the region's manufacturing sector as a whole, production, profitability and employment continued to decline during the quarter. However, optimism ahead of 2027 remains strong. A majority of manufacturers expect production volumes to increase next quarter, bringing the indicator close to boom-level conditions. Despite this, manufacturers still expect to reduce their workforce.

The services sector is also seeing brighter prospects and reports a strong economic tendency. More companies experienced increased demand (+28) than decreased demand during the quarter. A similar outlook prevails for the coming quarter and six months ahead, with most companies expecting demand to continue rising. Uncertainty is greater in terms of profitability and recruitment.

Tourism boosts retail trade, shows new data

Commerce has been the strongest performing sector this year. Physical retail activity in Gothenburg’s city centre increased during the latest quarter, and favourable conditions are expected to continue. Many retailers anticipate rising sales volumes, while employment is expected to remain largely unchanged.

Consumption in the Gothenburg region amounted to SEK 39.4 billion during the third quarter of 2026, shows a new type of data from credit card company Visa. In real terms, this was SEK 2.3 billion more than during the same quarter last year, representing growth of 6 per cent.

“Domestic visitors from elsewhere in Sweden accounted for SEK 1.6 billion of the increase in consumption, while international visitors contributed half a billion kronor. Together they accounted for 90 per cent of the increase, highlighting the importance of tourism for the region. At the same time, Gothenburg residents themselves also increased their spending. Food, restaurants and entertainment accounted for the largest share of spending,” says Peter Warda, Senior Analyst at Business Region Göteborg.

Unemployment approaching the 2000s average

Employment in the Gothenburg region has now increased for sixteen consecutive months, reaching 598,000 employed persons, up 1.0 per cent year-on-year. Employment growth has been recorded across most sectors, with the exception of manufacturing and information and communication.

In October, the unemployment rate was 6.2 per cent in the region, down 0.2 percentage points compared with a year earlier. This is slightly below the national average and lower than in both the Stockholm and Malmö regions. The regional average unemployment rate during the 2000s has been 6.1 per cent.

However, redundancy notices have risen to 555 persons per month, significantly above the historical average for the 2000s. These figures do not yet include the effects of the new workforce reductions announced by Volvo Cars in October. The extent of additional redundancy notices remains to be seen.

The number of newly advertised jobs stands at approximately 3,800 per month (July-September), substantially below the record levels seen in 2022 and continuing to decline.

“In Sweden, like elsewhere in Europe, household consumption and the public sector have kept employment up recently. We are still waiting for export-oriented manufacturing to regain momentum. Companies believe this may happen after the turn of the year. In that sense, the labour market remains divided,” says Peter Warda.

Regional growth outlook improves slightly

International growth prospects have developed in different directions since the previous report. The export-weighted GDP growth forecast for the Gothenburg region's ten largest export markets has been revised up slightly to 1.9 per cent for 2026 and remains at 1.8 per cent for 2027. Denmark and Germany are expected to perform somewhat better than previously forecast. The United States, Belgium, Norway and China remain the region's most important export markets.

Economic Outlook #4 2026 is attached. Note: Slides with fact on Nordic economy and Gothenburg in a Nordic business context are included.