The significant decline in industrial production seen earlier in the fall continues. The business cycle will bottom out by summer 2013 followed by weak recovery. Unemployment will rise despite an unused labour market potential corresponding to one million jobs. Forecasted GNP growth for Sweden in 2013 is 0.3% lower. All this according to the Confederation of Swedish Enterprise economic outlook report for the fourth quarter entitled ‘The Million-wide Gap’.
”Exports to Europe shrink significantly due to cutbacks many countries have implemented to address their run-away national debt problems. Swedish manufactures were first out with redundancy notices, but this wave has spread to domestic sectors as household spending is negatively impacted by fears of rising unemployment,” noted Stefan Fölster, Chief Economist for the Confederation of Swedish Enterprise.
The current forecast shows increasing unemployment, which will remain high even as GNP growth begins to recover in the fall.
The report outlook also shows that Sweden has unused labour potential comparable to a million jobs annually. This potential includes currently unemployed, part-time underemployed, or those forced into early retirement. The unused potential in the Swedish markets is greatest in Örebro County and least in Gotland.
”The level of structural unemployment in Sweden has increased in every recession over recent decades. Unfortunately, redundancies issued today will also lead to lost jobs that never return. This trend can be reversed, though. To ensure these jobs remain after the current downturn, Sweden should invest in further legislative reforms promoting work and improving the business climate,” concluded Mr. Fölster.
An international review shows that a wave of such reforms is on the way in many countries Sweden competes with. The debt crisis has created the basis for significant structural reform throughout Europe, and in connection with debt reduction plans, many of these countries are preparing structural reforms to improve their international competitiveness and capability to create growth and new jobs.
Source: Svenskt Näringsliv
”Exports to Europe shrink significantly due to cutbacks many countries have implemented to address their run-away national debt problems. Swedish manufactures were first out with redundancy notices, but this wave has spread to domestic sectors as household spending is negatively impacted by fears of rising unemployment,” noted Stefan Fölster, Chief Economist for the Confederation of Swedish Enterprise.
The current forecast shows increasing unemployment, which will remain high even as GNP growth begins to recover in the fall.
The report outlook also shows that Sweden has unused labour potential comparable to a million jobs annually. This potential includes currently unemployed, part-time underemployed, or those forced into early retirement. The unused potential in the Swedish markets is greatest in Örebro County and least in Gotland.
”The level of structural unemployment in Sweden has increased in every recession over recent decades. Unfortunately, redundancies issued today will also lead to lost jobs that never return. This trend can be reversed, though. To ensure these jobs remain after the current downturn, Sweden should invest in further legislative reforms promoting work and improving the business climate,” concluded Mr. Fölster.
An international review shows that a wave of such reforms is on the way in many countries Sweden competes with. The debt crisis has created the basis for significant structural reform throughout Europe, and in connection with debt reduction plans, many of these countries are preparing structural reforms to improve their international competitiveness and capability to create growth and new jobs.
Source: Svenskt Näringsliv
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