Gothenburg's economy resisting Sweden’s slowdown
The Gothenburg region is so far resisting the slowdown taking hold in Sweden and other euro zone countries. The labour market and wage sum are growing more strongly than in Sweden’s other metropolitan regions and the weak Swedish krona is benefitting car exports. Despite a slowing housing market, the number of new housing developments being started in the Gothenburg region is also increasing. These are some of the findings in Business Region Göteborg’s latest Economic Outlook report.
Swedish economic growth weakened significantly during the first half of 2019 and is well below the average for the 2000s – 2.3 per cent. But there are signs that the Gothenburg region is standing strong in spite of weakening national growth.
“The labour market continues to grow more quickly than both the Stockholm region and Sweden as a whole. The wage sum growth is higher than the national figure and the housing market in the Gothenburg region is relatively strong,” says Henrik Einarsson, director of establishment and investment services at Business Region Göteborg.
Strong job growth
For the second quarter, job growth in the Gothenburg region was 3.6 per cent year-on-year. This was stronger than in the Stockholm region (1.9 per cent), Malmö region (1.1 per cent) and Sweden as a whole (0.7 per cent).
“The Gothenburg region saw strong jobs growth during Q2 and nearly half of all the new jobs in Sweden were created here,” says Henrik Einarsson.
The region's new jobs were created mostly in knowledge-intensive business services and financial services as well as in commerce and transport.
Purchasing power continues to rise
For the second quarter, the real wage sum growth in the Gothenburg region was 4 per cent, year-on-year. The same figure for Sweden as a whole was 3.1 per cent.
“Gothenburg’s labour market has been strong and its industry is going well. It seems to be more resistant than we thought. We aren’t seeing any large layoffs being made,” says Henrik Einarsson.
Housing market differs from Stockholm
The prices of flats in all three of Sweden’s metropolitan regions have increased in the short term, 1-6 months. When it comes to house prices the greatest increases are seen in the Gothenburg region (5.9 per cent).
The sales of newly produced flats remains sluggish in Sweden. However, Gothenburg is demonstrating greater resistance compared with the Stockholm and Malmö regions. The number of newly started housing developments in the second quarter in the Gothenburg region increased by 12 per cent year-on-year in the Gothenburg; and decreased by 12 per cent and 40 per cent in the Stockholm and Malmö regions respectively.
“The number of housing developments starting up in Gothenburg has been at a high level over a long period of time. The numbers reflect that we have another type of production here in the Gothenburg region. Land is not as expensive and the homes aren’t as exclusive as in Stockholm, for example,” says Henrik Einarsson.
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