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Economics and business in Sweden

The largest sector in Sweden is service industries, which employ 80 per cent of the working population (2016). From the mid-1800s, the industry in Sweden gradually took over agriculture as the dominant industry, and the industry continued to grow until the mid-1970s, before the service industries took over.

Business and Economy of Sweden

Economy

Ever since the 1930s, the principle of full employment has prevailed in the Swedish economy. During the 1980s, this became more difficult to achieve, partly because of high inflation and low economic growth rates. Several of Sweden's most important industries (the shipyards, the steel industry and others) had significant marketing difficulties in the world market; the country also had high price increases and several devaluations. Poorer competitiveness led to rising unemployment and a pressure to restructure business.

A crisis plan was drawn up to increase new investment and exports and reduce inflation and unemployment. The economic crisis reached its peak in 1992, with strong pressure on the Swedish krona and new dramatic tightening. In order to meet the demands of the EU, the deficits in the state budget and foreign debt also had to be reduced. Tax reforms, the privatization of government activities and the reduction of public expenditure were among the instruments.

From 1993, there were signs of improvement in the Swedish economy, with a current account surplus, lower budget deficits and increased investments. After a period of sharp reduction in public spending, these were again increased in 1998. At that time, unemployment figures were also on the decline.

After a few years of positive economic development, the economy stagnated as a result of the turmoil in the world economy after September 11, 2001. A decline in high technology led to large capital flows out of the country and contributed to the strong weakening of the Swedish krona against the US dollar and the euro. Rising unemployment and continued high absenteeism led to increased government spending, while the deteriorating world economy led to reduced economic activity in the country and lower government revenues. During 2004, the economic situation improved, and the following year the budget deficits turned into a surplus.

The international financial crisis that began in the fall of 2008 also affected the Swedish economy noticeably; in 2009, GDP fell by 5 per cent. Thanks to an already tight fiscal policy and room for government stimulus after several years of budget surpluses, Sweden became one of the best performing countries during the crisis. From 1994 to 2015, Sweden had a surplus on the trade balance abroad each year. The trade surplus has been declining since the beginning of the 2000s, and in 2016, 2017 and 2018 the trade balance was negative. Unemployment has long been at a higher level than in Norway. In 2017, the unemployment rate was 6.7 per cent, while that of young people under 25 was 19 per cent.

Gross national income (GNI) is $ 53,900 per capita (2018). Agriculture (including forestry and fisheries) contributed just over one percent of GDP and two percent of employment in the same year, while industry (including mining) contributed 25 percent of GDP and 12 percent of employment, and service industries accounted for the remaining. One third of the workforce is employed in the public sector.

Agriculture

The natural production conditions in Sweden vary considerably, both in terms of climate and soil. The growing season is only 4-5 months in Norrland, while it is 8-9 months in Skåne. The soil is mostly poor in the north with lots of moraine gravel and marsh; it is significantly better below the marine border in central Sweden. However, the best agricultural area in Sweden, with the highest yield, is southwestern Skåne's moraine clay soil.

After 1950 there has been a significant closure of marginal agricultural land, with a concentration of agriculture to the most productive areas in the country. The proportion of farms with less than 500 acres of agricultural land was sharply reduced. The reduction in the country's agricultural area occurred especially in the 1950s and 1960s, and to a greater extent in the forest areas in central Sweden and in Norrland. There has also been an extensive merger into larger utility units. Over the past 40 years the number of farms has been halved.

The mechanization of agriculture has come a long way, so that productivity is maintained despite less agricultural land and fewer farmers. The total agricultural area today is approx. 7 per cent of the land area, of which just over 80 per cent is arable land, and the rest is nature meadow and pasture land.

Barley is grown all over the country, oats especially in the west and in the forest, and wheat in the plain in central Sweden and in Skåne. The ridge and building area has declined sharply. There is also considerable potato growing. Sugar beets are grown substantially in Skåne, and oil growth is grown in Skåne and central Sweden as part of the growth shift.

These areas also have a lot of animal husbandry; livestock products form an important part of Swedish agriculture. Animal husbandry has also been made more efficient by the fact that fewer farms use livestock, while the livestock farms have increased the number of animals and are more specialized with one animal species. The largest income in livestock farming comes from milk production.

In southern Sweden, there is considerable meat production with large production of chicken and pork. In Gotland, sheep farming is of great importance. Reindeer husbandry is found especially in Norrbotten, but also in Västerbotten and Jämtland. The most important agricultural products, such as dairy products, meat, cereals and potatoes, are mainly for domestic consumption.

Forestry

Sweden is one of Europe's most wooded countries, with a productive forest area of ​​226,000 km2, 52 percent of the land area. Parts of Skåne, Halland and Blekinge are covered by warm-cut deciduous forest (mostly beech); spruce, pine and birch dominate. The best and most productive forest areas are located north of Vänern, in Värmland and Dalarna, with more than twice as fast growth as the forests further north. Of a standing cubic mass of 3.2 million m 3 spruce constitutes 43 percent, pine 39 percent, birch 12 percent and other deciduous trees 6 percent. Annual growth is 120 million m 3, of which approx. 2/3 harvested.

A large part of Sweden's forests is owned by large companies. 25 per cent is owned by privately owned companies, while 14 per cent is owned by the state-owned company Sveaskog. A further 3 percent is directly owned by the state.

Forestry forms the basis for the wood-based industry, with the production of paper, wood pulp and wood products. Of a net harvest of 73 million m 3 in 2017, 37 million m 3 went to sawmills, 28 million m 3 to the pulp industry and 8 million m 3 to energy mills.

Fisheries

In 2018, 212,000 tonnes of fish and shellfish were caught. The most important catch areas are the North Sea, the Kattegat, the Skagerrak and the Baltic Sea. About. 2/3 of the catch is collected in the Baltic Sea. The main fish species are herring (flooding) and cod. Streaming is a herring fish native to the Baltic Sea.

Particularly shrimp and sea crabs are caught by shellfish; the most important catch area is along the west coast. Freshwater fishing also has a certain significance, including salmon, eel and trout.

Mining

Mining has long been an important branch of Swedish business. Although mining's importance to the national economy has diminished, mining and metal industry still account for 12 per cent of Swedish exports (2013). Sweden is the largest mining country in the EU.

In the 16th and 16th centuries, Falun copper mine was the largest in Europe. In the 18th century, Sweden was a leader in iron production, based on mining of almost phosphorus-free ores in a number of places in the middle part of the country, especially in Bergslagen. First began the exploitation of the ore deposits at Grängesberg in Bergslagen, and then of the enormously rich deposits in Kiruna - Gällivare. Iron ore production has slowed in recent years, among other things, Dannemora mines were closed down in 1992, and production is now concentrated to LKAB's mines in Kiruna and Malmberget. Total production of the enriched and pelleted iron ore amounted to 29 million tonnes in 2014. About. 80 per cent goes to exports, most of them by rail over the port of Narvik. LKAB has processing plants, among others in Svappavaara.

The decline in iron ore production, which started in the latter part of the 1970s, was primarily caused by foreign competition. Production of quality steel has rich traditions in Sweden, and a large part is exported. The largest iron and steel plants are located in Bergslagen and Värmland: Avesta and Hagfors, among others. Large works have also been erected in the ore ports of Luleå and Oxelösund.

The extraction of sulphide ores is of great importance. Large quantities of copper ore, lead, zinc, gold and silver are extracted from the sulphide ore mines. The mining company Boliden Mineral accounts for most of the extraction of sulfide ores in Sweden. The largest mines are Aitik at Gällivare (Europe's largest copper mine), the Skellefteå field (copper ore, sulfur coffin, gold, silver and arsenic) with a number of mines, Askersund and Hedemora municipalities. Sweden has approx. 15 percent of the world's uranium reserves.

Industry

The most important industrial sector by production value is the workshop industry, which in Sweden is very heterogeneous and comprises the production of transport equipment, metal products, machines, electrical engineering products and instruments. In total, the workshop industry accounts for approx. 50 percent of the industry's total turnover and export value.

In the engineering industry, the production of transport equipment and metal products is the most important. Previously, motor vehicles (and parts) were the largest single item in foreign trade, with Volvo, Saab and Scania as the largest companies. During the international financial crisis after 2008, the automotive industry has been hard pressed, and from 2010/2012 Volvo and Saab's personal car divisions were taken over by Chinese owners. Swedish-owned Volvo AB today produces trucks and buses, while in 2008 Scania was acquired by Volkswagen.

Sweden has traditionally been a leading shipbuilding country, with large shipyards in Gothenburg, Malmö, Uddevalla and Landskrona. Foreign competition in the 1970s, however, led to the close closure of the industry during the 1980s, with the loss of over 20,000 jobs. The shipbuilding industry still operates mainly in Gothenburg and military production (submarines) in Karlskrona.

The machine industry is most strongly represented in the largest cities; also in Eskilstuna (knives, instruments), Sandviken (tools), Karlskoga (Bofors with weapons and defense equipment), Munkfors (thin plates) and Huskvarna (Electrolux household appliances). Among Sweden's hardware manufacturers are some of the country's largest industrial companies. Several have significant operations abroad as well.

The electrotechnical industry is an important part of production and export; the industrial groups ABB (heavier electrical engineering equipment) and Husqvarna AB dominate the industry. The electrical industry is spread throughout the country, but with particularly large production in the Stockholm area. Stoves, transformers, generators and equipment for hydropower plants and nuclear power plants are being manufactured.

The electronics industry is a relatively small but important industry that is growing, with the development of communication equipment, optics, processors and computers. Among the instrument companies are LM Ericsson (telecommunications), Elektra and Mölnlycke with medical technology, Hasselblad (cameras) and Saab Instruments.

Sweden has traditionally large production of wood products and wood processing products, with sawmill, wood pulp, cellulose and paper mills, furniture production and more. The sawmill industry is particularly localized to the outlets of the Norrland rivers, and to Dalarna and Värmland. The wood and furniture industry is concentrated in Småland, as well as Vestergötland and Skåne.

The graphic industry is particularly concentrated in the Stockholm, Gothenburg, and Malmö areas, and the same applies to parts of the food and beverage industry. The food industry is dominated by the companies of the agricultural and consumer cooperatives (Lantmännen, Scan, Arla and AAK), but also by subsidiaries of international large companies.

The clothing industry is represented in the largest cities; Borås is known for the production of knitwear and woolen goods. Textiles and clothing have had a long period of sharp decline. In 1950, the industry had 115,000 employees, in 1995 just under 12,000. Later, however, the industry has experienced some growth.

The chemical and petrochemical industry has major petroleum refineries in Gothenburg, Stenungsund and Nynäshamn; chemical factories are located in Helsingborg, Gothenburg, Lysekil (Scanraff), Örebro and Stockholm. Among large companies are Akzo Nobel (color and paper chemicals) and AGA (gas production). In recent years, the pharmaceutical industry has largely been taken over by foreign owners. Pharmacia was acquired by Pfizer in 2003 and later closed down, while in 1999 Astra merged with British Zeneca to AstraZeneca.

Foreign Trade

Swedish foreign trade has a very large scope. The EU countries constitute the largest and most important market, and in 2018 accounted for 60 per cent of Sweden's exports and 70 per cent of imports. Germany, the United Kingdom and Denmark are the main trading partners in the EU; US and Norway among non-member countries.

Some important export goods are means of transport, electrical machinery, wood and wood pulp, chemicals and paper. Fuel, machinery and transport (and equipment), food, textiles and chemicals are important import goods. See other table.

Foreign trade as a percentage by country (2018).

Export Import
Germany 11 18
United States 6 3 1
Norway 10 9
Great Britain 7 1 5
Denmark 7 1 7
  1. Figures from 2013

Source: UN

Exports by main product groups (2013).

Category %
Chemicals and related products (including medicines etc. 62%) 13
Petroleum and petroleum products 8
Wood products, pulp and paper 11
Ore and metal 10
Machinery and metal products 19
Vehicles 21
foodstuffs 6
Electronics and telecoms 11

Transport and Communications

Railways

Sweden's first railway was opened in 1856 between Örebro and Ervalla, which is a few miles further north. By then the construction of a railway network between the major cities was already underway. In 1862 the section opened Stockholm-Gothenburg. Its greatest spread was the railway network in the mid-1930s with 17,000 km. After rationalization and closure of unprofitable stretches in the 1960s, the railway length has stabilized at approx. 11,000 km, of which 90 per cent are electrified.

Passenger traffic has increased in recent years. Most of the passenger transport is carried out by SJ (Statens Järnvägar), while about twenty private companies account for a significant share in a market that is currently completely deregulated. In 2014, 10 per cent of passenger transport went on track. Freight transport declined for many years, but stabilized at around 55 million tonnes from the mid-1980s.

The road network

The road network is well developed, especially in the central and southern parts of the country. Over 70 percent have a fixed deck. There are a total of 1920 km of motorways (2012), mainly in southern Sweden. Northern Sweden has only minor sections with highway standards. Road and rail connection (Øresund connection) between Malmö and Copenhagen was completed in 2000.

Aviation

Civil aviation is well developed; the leading airline is SAS. Arlanda is by far the largest airport north of Stockholm, followed by Landvetter at Gothenburg and Bromma in Stockholm. For southern Sweden, Copenhagen Airport is important.

Shipping

In 2017, the merchant fleet consisted of 304 ships (100 gross tonnage and above) with a total tonnage of 2.6 million gross tonnes, the majority of which were dry cargo vessels. The most important ports are Gothenburg, Helsingborg, Stockholm, Malmö, Norrköping, Gävle and Ystad. There is a large export over Gothenburg harbor of, among other things, cars, iron and steel products, chemicals, wood pulp and paper.

There are a number of ferry connections with abroad, including Stockholm and Helsinki, Mariehamn, Turku (Finland), Tallinn (Estonia), St. Petersburg (Russia), Riga (Latvia) and Klaipeda (Lithuania), between Helsingborg and Helsingør (Denmark)), between Trelleborg and Travemünde and Sassnitz (Germany). Malmö is connected with Travemünde.

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