Gothenburg going strongly despite international risks
The Gothenburg region's business environment continues to perform well in spite of uncertainty in key international markets. Car exports are growing strongly, the wage sum is increasing more than the national average and job growth is robust. These were some of the findings in Business Region Göteborg’s first Economic Outlook report of 2019.
Business Region Göteborg, which has produced the report, has previously stated that the economy has tapered off in the region, but the effects are obviously delayed.
“The global economy has slowed, though it’s not showing here just yet. Exports are soaring, total wage sum is growing which means that employment has increased – and at a significantly faster pace than the nation as a whole. It hasn’t been this strong since 2012,” says Henrik Einarsson, Head of Business Establishment and Investment at Business Region Göteborg.
For 2018, Swedish car exports increased by 29 per cent on the previous year. The biggest driver was China, which increased by 122 per cent. Strong growth was also seen in car exports to Norway and Finland, while car exports to the USA fell by 30 per cent.
For the full year, the real growth in total wage sum of the region’s private sector was 4.6 per cent, while the corresponding figure for Sweden as a whole was 3.2 per cent. This means that the purchasing power in the region is further strengthened.
During the fourth quarter of 2018, Sweden’s GDP increased by 1.2 per cent over the previous quarter. The biggest contributor to the increase between quarters was an increase in exports.
For the full year 2018, growth in GDP was on a par with the average growth for the 2000s at 2.3 per cent.
“All of the forecasts suggest that economic growth will weaken. But the question is if it will weaken so much that it results in a recession. I don’t believe it will,” says Henrik Einarsson.
Henrik Einarsson explains that there are several global factors that can have adverse effects on Gothenburg’s business community, including growing protectionism with car and steel tariffs, Brexit and China’s economic situation.
According to a report from the World Trade Institute in Bern, 3,500-4,000 jobs in Sweden can disappear if car tariffs are introduced by the USA. Around half of the jobs in the Swedish car industry are concentrated in the Gothenburg region and its surroundings.
Housing prices stable
The report also shows that housing prices have stabilised, although there are signs that the sale of flats is sluggish.
“A consequence of the slow market is that the production pace has weakened somewhat. In turn, this can result in the prices stabilising. But the need for housing remains high in the region,” says Henrik Einarsson.