In recent years, Norrland has been to some extent the driver of Swedish growth.
For the past five years, either northern Norrland (defined as Västerbotten and Norrbotten counties) or central Norrland (Jämtland and Västernorrland) has been the fastest growing region in Sweden, measured in GRP (gross regional product).
Next year, it looks like that will change, with Nordea predicting a GRP of 1 percent for northern Norrland - down from 1.5 percent this year, and 1.5 percent for central Norrland (the same as this year), while Stockholm is expected to see GRP rise to 2 percent in 2025, up from 0.5 percent.
It’s not all bad news, though.
The green industry and electrification of the transport sector in northern Norrland may be losing steam, but growth has broadened in recent years to other sectors like defence and basic industries, meaning that the region’s growth is no longer tied to individual companies or an individual industry.
Norrland, along with Skåne, has also increased its employment rate more than the rest of the country since the pandemic, and northern Sweden as a whole is home to an ever-growing number of new jobs.
Population numbers have also dropped in 15 of 21 counties. Although Stockholm, Uppsala, Skåne, Halland and Västra Götaland all saw an increase in population, again there is good news for Norrland.
“The only county where population growth has increased by more than usual is Västerbotten,” the report reads.
Västerbotten is also the only county where population growth increased by more than 1 percent year-on-year, where Skellefteå in particular stands out.
“Central Norrland continues to take ground with much stronger economic development than the rest of the country,” the report adds.
“The demand for labour, measured in the number of new jobs, has only decreased by 20 percent. In the rest of the country it has halved.”
Central Norrland may be the smallest region in the country, but it represents around 3 percent of Swedish GDP and 5 percent of new jobs, and unemployment is also low, the report adds.
In contrast, Stockholm’s demand for new labour - measured in the number of new jobs - has halved since 2022, and northern Sweden as a whole is expected to contribute more to GDP than Stockholm this year.
The report describes Stockholm’s economic growth as “losing steam”, while central Norrland has “good growth figures."
"Interest rate cuts provide support to both global growth and domestic demand, which speaks in favour of improved growth figures [for central Norrland] next year," it continues.
The story is similar in northern Norrland, which is home to 8 percent of new jobs in the country, as well as Sweden’s lowest unemployment figures.
In northern Norrland, Nordea writes in general that “the growth journey continues”, although there are “risks if the green transition loses steam”, describing the business situation in the region as “neutral”.
“These challenges however should not fundamentally rewrite the map, but could lead to slower economic growth in coming years,” the bank wrote.
This report was sent to print on September 23rd, the same day that Northvolt announced that up to 1,000 people at its Skellefteå site risked redundancy, and is based on Nordea's most recent economic outlook from September 4th.
Having said that, the bank appears to be confident that news of layoffs in Norrland will not change its prognosis.
"I don't want to say that single companies don't make a difference, but we're seeing broad growth and that's not coming from a single company," Nordea's macroeconomic head Susanne Spector told the TT newswire on Tuesday, the day after the news from Northvolt.
"Growth has broadened from Västerbotten to the whole of Norrland," she added. "Export companies have for example positioned themselves well when it comes to the green transition."
Are you going to be affected by layoffs at Northvolt, or do you have questions about how the process works? Get in touch, either by leaving us a comment or emailing news@thelocal.se.
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