Norrland Slows Down – Metropolitan Areas Take Over

Upper Norrland has in recent years been the driving force behind Swedish growth, while the metropolitan regions have acted as a brake. Now, the roles are expected to be reversed. The metropolitan regions are expected to catch up when the interest rate cuts gain momentum, says Susanne Spector, macro chief at Nordea.

» Updated: October 07 2024

» Published: September 24 2024

Norrland Slows Down – Metropolitan Areas Take Over
Photo: Pontus Lundahl/TT

Share this article

A fresh report from Nordea has looked at the economic situation in different parts of Sweden. Next year, the Stockholm region is expected to grow by two percent of GRP (gross regional product). The corresponding figure for Upper Norrland is only one percent, which indicates a shift in the Swedish economy.

The major cities have generally had it tougher, and it is a reflection of the economic situation. The domestic economy in major cities has been heavily affected by interest rate hikes, says Spector.

Downturn in the export industry

In 2025, the metropolitan regions of Southern Sweden and Western Sweden are also expected to grow by 1.7 and 1.8 percent of GRP, respectively.

It will take some time before the interest rate cuts take full effect, but already next year it looks like it will be a more normal year where the major cities will account for the largest increase percentage-wise.

The export sector in northern Sweden is still expansive but faces a downturn next year and is expected to lose growth momentum.

Upper Norrland is still growing faster than expected, but now we see a slowdown. You can't take a super leap every year. Then there is a general dampening in the industry, says Spector, citing the automotive industry in Germany as an example:

The transition to electric cars has gone slower than expected, which affects parts of the Swedish export industry.

Signs of recovery

Individual companies like Northvolt – where investments have not gone according to plan – have not had a significant impact on regional growth as a whole. The demand for labor is also expected to be highest in the north.

I'm not saying that individual companies don't play a role, but it's broad growth that we've seen, and it's not coming from a single company. The growth has broadened from just being about Västerbotten to include all of Norrland. Export companies have, among other things, been well-positioned in the green transition.

Sweden's GDP (gross domestic product) is expected to increase by 1.6 percent according to the report's prognosis. It is a recovery compared to previous years, although it is 0.6 percentage points lower than the year before the pandemic.

It's a sign of recovery, says Spector.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Nvidia Stock Drops 2.7% Amid New York Market Decline
1 MIN READ

Nvidia Stock Drops 2.7% Amid New York Market Decline

Trump Criticizes EU's $33.9 Billion Fine on Google, Threatens Trade Probe
2 MIN READ

Trump Criticizes EU's $33.9 Billion Fine on Google, Threatens Trade Probe

US Job Market Slows with Only 22,000 New Jobs in August
2 MIN READ

US Job Market Slows with Only 22,000 New Jobs in August

Tesla Board Proposes New Bonus Plan for Elon Musk
1 MIN READ

Tesla Board Proposes New Bonus Plan for Elon Musk

13 Suspected of Insider Trading After Dawn Raid
1 MIN READ

13 Suspected of Insider Trading After Dawn Raid

18 Charged in Major Insider Trading Case in Sweden and Norway
1 MIN READ

18 Charged in Major Insider Trading Case in Sweden and Norway

Skandiabanken Offers Lowest Mortgage Rates in August
1 MIN READ

Skandiabanken Offers Lowest Mortgage Rates in August

Stockholm Stock Market Rises for Third Consecutive Day
1 MIN READ

Stockholm Stock Market Rises for Third Consecutive Day

Danish Energy Giant Ørsted Lowers Profit Expectations for This Year
1 MIN READ

Danish Energy Giant Ørsted Lowers Profit Expectations for This Year

Foreign Ownership Boosts Swedish Economy with Productivity Growth
1 MIN READ

Foreign Ownership Boosts Swedish Economy with Productivity Growth

Calm Housing Market Spurs Speculator Interest
2 MIN READ

Calm Housing Market Spurs Speculator Interest

Asian Stock Markets Rise Amid US-Japan Tariff Agreement
1 MIN READ

Asian Stock Markets Rise Amid US-Japan Tariff Agreement

USA and Japan Reach New Trade Agreement on 15% Tariffs
1 MIN READ

USA and Japan Reach New Trade Agreement on 15% Tariffs

Activity Toys Pose Serious Injury Risks for Children in EU Survey
1 MIN READ

Activity Toys Pose Serious Injury Risks for Children in EU Survey

Hexagon Sells Software Business for 30 Billion Kronor
1 MIN READ

Hexagon Sells Software Business for 30 Billion Kronor

US Stock Market Sees Broad Gains Amid Labor Market Weakness
1 MIN READ

US Stock Market Sees Broad Gains Amid Labor Market Weakness

Ørsted Sues Trump Administration Over Halted US Wind Project
1 MIN READ

Ørsted Sues Trump Administration Over Halted US Wind Project

US Private Sector Adds 54,000 Jobs in August, Below Expectations
1 MIN READ

US Private Sector Adds 54,000 Jobs in August, Below Expectations

Goldman Sachs: Fed Uncertainty Could Propel Gold Prices
1 MIN READ

Goldman Sachs: Fed Uncertainty Could Propel Gold Prices

Food Chains in Sweden Promise Price Cuts with VAT Reduction
3 MIN READ

Food Chains in Sweden Promise Price Cuts with VAT Reduction