Economic Outlook #2 2019

Squabbling giants could slow the economy

REAL GDP GROWTH – FORECAST 2019-2020 (IN PERCENT) FOR SWEDEN AND

SOME OF THE GOTHENBURG REGION’S KEY EXPORT MARKETS

* Average of the five last forecasts in the summary produced by the National Institute of Economic Research based on data from The

Swedish Trade Union Confederation LO, OECD, Nordea, Swedish Association of Local Authorities and Regions (SKL) and Unionen.

Source: IMF, April 2019

COUNTRYSHARE OF REGION’S

EXPORTS2019 2020

Sweden* 1.3 % ↗ 1.7 %

Belgium 12.5 % 1.3 % ↗ 1.4 %

USA 11 % 2.3 % ↘ 1.9 %

Norway 10 % 2.0 % ↘ 1.9 %

Germany 8 % 0.8 % ↗ 1.4 %

China 8 % 6.3 % ↘ 6.1 %

Denmark 7.5 % 1.7 % ↗ 1.8 %

UK 6 % 1.2 % ↗ 1.4 %

Finland 6 % 1.9 % ↘ 1.7 %

Netherlands 4 % 1.8 % ↘ 1.7 %

France 4 % 1.3 % ↗ 1.4 %

GDP growth for Gothenburg region’s 10 largest export markets

(weighted by export share)77 % 1.6 % → 1.6 %

Eurozone 1.3 % ↗ 1.5 %

World 3.3 % ↗ 3.6 %

World trade, goods and services 3.4 % ↗ 3.9 %

Average change in oil price per barrel -13.4 % ↘ -0.2 %

Slowdown continuing into spring

ECONOMIC TENDENCY INDICATOR FOR THE GOTHENBURG REGION

Source: Region Västra Götaland and Statistics Sweden

* Forecast autumn 2019

4

21

3743 46

24

9

30

4044

3426

-100

-80

-60

-40

-20

0

20

40

60

80

100

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9*

Indicator

Spring Autumn

Construction industry more guarded

ECONOMIC TENDENCY INDICATOR PER INDUSTRY IN THE GOTHENBURG REGION

Source: Region Västra Götaland and Statistics Sweden

48

45

35

32

26

24

23

22

19

19

16

1

-20 0 20 40 60 80

Automotive

IT consultants

Business services

Wholesale

Electronics

Gothenburg region total

Food

Manufacturing total

Machinery

Construction

Chemicals

Durable consumer goods

Actual spring 2019

Forecast autumn 2019

Economic boom

Indicator

Wage sum in the private sector continues to grow strongly

REAL GROWTH IN WAGE SUMS FROM THE PRIVATE SECTOR - CHANGE

COMPARED TO THE SAME QUARTER PREVIOUS YEAR

Source: Statistics Sweden

-4%

-2%

0%

2%

4%

6%

8%

200

1 Q

uarte

r 1

200

2 Q

uarte

r 1

200

3 Q

uarte

r 1

200

4 Q

uarte

r 1

200

5 Q

uarte

r 1

200

6 Q

uarte

r 1

200

7 Q

uarte

r 1

200

8 Q

uarte

r 1

200

9 Q

uarte

r 1

201

0 Q

uarte

r 1

201

1 Q

uarte

r 1

201

2 Q

uarte

r 1

201

3 Q

uarte

r 1

201

4 Q

uarte

r 1

201

5 Q

uarte

r 1

201

6 Q

uarte

r 1

201

7 Q

uarte

r 1

201

8 Q

uarte

r 1

201

9 Q

uarte

r 1

Gothenburg region

Sweden

5.5%

3.8%

Nine years of unbroken growth in employment

EMPLOYMENT INDICATOR - PERCENTAGE CHANGE IN NUMBER OF EMPLOYED ON ANNUAL BASIS

Source: Statistics Sweden

-2%

-1%

0%

1%

2%

3%

4%

5%

201

0 Q

uarte

r 1

201

1 Q

uarte

r 1

201

2 Q

uarte

r 1

201

3 Q

uarte

r 1

201

4 Q

uarte

r 1

201

5 Q

uarte

r 1

201

6 Q

uarte

r 1

201

7 Q

uarte

r 1

201

8 Q

uarte

r 1

201

9 Q

uarte

r 1

Gothenburg region

Sweden

2.8%

1.4%

Lowest unemployment figure since July 2007

UNEMPLOYED AND PEOPLE IN LABOUR MARKET POLICY PROGRAMMES -

PERCENTAGE OF THE WORK FORCE AGED 16 TO 64

Source: Swedish Public Employment Service and Statistics Sweden

9.5%

6.9%6.6%

5.7%5.3%

0%

2%

4%

6%

8%

10%

12%

200

70

5

200

80

5

200

90

5

201

00

5

201

10

5

201

20

5

201

30

5

201

40

5

201

50

5

201

60

5

201

70

5

201

80

5

201

90

5

Malmö region

Sweden excl. metro regions

Sweden

Stockholm region

Gothenburg region

Redundancy numbers straying a little above the trend

NEW VACANCIES FOR PERMANENT POSITIONS AND REDUNDANCIES IN THE GOTHENBURG REGION -

THREE-MONTH ROLLING AVERAGE

Source: Swedish Public Employment Service

7 911

334

0

2 000

4 000

6 000

8 000

10 000

12 000

200

70

5

200

80

5

200

90

5

201

00

5

201

10

5

201

20

5

201

30

5

201

40

5

201

50

5

201

60

5

201

70

5

201

80

5

201

90

5

New vacancies

Redundancies

Modest increase in vacancy rate

VACANCY RATE FOR THE OFFICE MARKET IN GOTHENBURG

Source: JLL

1.6%

4.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

200

2 Q

uarte

r 1

200

3 Q

uarte

r 1

200

4 Q

uarte

r 1

200

5 Q

uarte

r 1

200

6 Q

uarte

r 1

200

7 Q

uarte

r 1

200

8 Q

uarte

r 1

200

9 Q

uarte

r 1

201

0 Q

uarte

r 1

201

1 Q

uarte

r 1

201

2 Q

uarte

r 1

201

3 Q

uarte

r 1

201

4 Q

uarte

r 1

201

5 Q

uarte

r 1

201

6 Q

uarte

r 1

201

7 Q

uarte

r 1

201

8 Q

uarte

r 1

201

9 Q

uarte

r 1

Central Business District

Rest of Inner City

Norra Älvstranden

Gothenburg total

3.1%

2.3%

Housing prices increase again

PRICE DEVELOPMENT OF FLATS AND HOUSES, MAY 2019 COMPARED TO

1, 3, 6 AND 12 MONTHS BACK IN TIME

Source: Valueguard

1 MONTH 3 MONTHS 6 MONTHS 12 MONTHS

HOUSING TYPE CITY/REGIONAPR 2019-

MAY 2019

FEB 2019-

MAY 2019

NOV 2018-

MAY 2019

MAY 2018-

MAY 2019

Flats Gothenburg 0.9 % 2.0 % 2.0 % 0.0 %

Stockholm 0.8 % 1.6 % 1.4 % 1.2 %

Malmö 1.2 % 1.1 % 0.8 % 3.4 %

Sweden 0.6 % 1.5 % 1.8 % 1.1 %

Houses Gothenburg region 0.3 % 3.1 % 4.0 % 2.8 %

Stockholm region 0.8 % 2.1 % 3.0 % 2.1 %

Malmö region 1.4 % 3.9 % 5.7 % 7.3 %

Sweden 0.7 % 2.6 % 3.8 % 2.3 %

Population growth still stronger than the national average

POPLUATION GROWTH PER QUARTER IN THE GOTHENBURG REGION

Source: Statistics Sweden

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Quarter 4

Quarter 3

Quarter 2

Quarter 1

TABLE SUMMARISING THE ECONOMIC SITUATION IN THE GOTHENBURG REGION –

COMPARISON WITH CORRESPONDING PERIOD THE PREVIOUS YEAR

Source: Region Västra Götaland, Statistics Sweden, Swedish Public Employment Service, JLL, The Swedish Transport

Agency and The Swedish Agency for Economic and Regional Growth

INDICATOR 2019 2018 CHANGE

Economic tendency, spring 24 46 – 22 units

Total wage sum (real SEK billion), quarter 1 52.3 49.8 +5.0 %

Private sector wage sum (real SEK billion), quarter 1 39.9 37.8 +5.5 %

People in employment, quarter 1 546,700 531,600 +2.8 %

Unemployment 16-64 years, May 5.3 % 5.5 % – 0.2 %-points

Unemployment among domestically born 16-64 years, May 2.7 % 2.7 % ±0.0 %-points

Unemployment among foreign-born 16-64 years, May 14.5 % 15.5 % – 1.0 %-points

Unemployment 18-24 years, May 5.4 % 5.6 % – 0.2 %-points

Unemployment among domestically born 18-24 years, May 3.2 % 3.5 % – 0.3 %-points

Unemployment among foreign-born 18-24 years, May 18.6 % 21.2 % – 2.7 %-points

Job vacancies, March – May (monthly average) 7,911 9,618 – 17.7 %

Redundancies, March – May (monthly average) 334 163 +104.9 %

Vacancy rate for office space in Gothenburg, quarter 1 4.0 % 3.6 % +0.4 %-points

Population, quarter 1 1,031,617 1,015,974 +1.5 %

New car registrations, quarter 1 7,931 10,615 – 25.3 %

Air passengers, March – May (monthly average) 547,946 567,363 – 3.4 %

Guest nights, quarter 1 (monthly average) 301,385 304,223 – 0.9 %

BUSINESS REGION GÖTEBORG – EN DEL AV GÖTEBORGS STAD I SAMARBETE MED REGIONENBUSINESS REGION GÖTEBORG – A PART OF THE CITY OF GOTHENBURG IN COOPERATION WITH THE REGION