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Labour market storm subsiding: job agency

The worst appears to be over for the Swedish labour market, according to the country’s employment agency, which projects that unemployment will stop rising in the second half of 2010.

Published: 09 Dec 2009 14:30 CET

In a newly released forecast, Sweden’s National Public Employment Agency (Arbetsförmedlingen) predicts that unemployment will peak at 9.4 percent next year before dropping to 9.1 percent in 2011.

“There is much to indicate that the economic climate is headed for an improvement from last year’s sharp downturn,” agency head Angeles Bermudez Svankvist said in a statement.

The employment agency’s latest labour market forecast is substantially more optimistic than the one released last spring, including downward revisions in how far employment is expected to drop in 2010.

Lead forecaster Tord Strannefors points to clear signs that the global economic situation is headed toward a recovery as well as increased optimism among employers.

“Companies we’ve interviewed have a very positive view of the future. But they’re coming from very low levels,” Strannefors told the TT news agency.

Improvements in the Swedish labour market, however, aren’t expected to reach every region of the country.

Counties with a large percentage of manufacturing jobs and which have already suffered from depressed economic conditions are still expected to have a hard time in the future, according to the employment agency.

Currently, Gävleborg County in eastern Sweden has the country’s highest jobless rate.

“That’s been made worse by Ericsson’s closure. That wasn’t something we included in this forecast,” said Strannefors.

Employment is expected to shrink by 108,000 people in 2009 and 55,000 people in 2010, according to Arbetsförmedlingen.

In 2011, the agency expects a marginal upswing in employment of 10,000 jobs. The modest size of the increase is a byproduct of the fact that many companies have surplus capacity at present and can likely increase production without needing to hire more workers.

The forecast is based in part on interviews with approximately 12,500 private sector employers.

TT/The Local (news@thelocal.se)


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