Speaking to public broadcaster SVT, the agency’s director general Mikael Sjöberg predicted that a labour shortage will start to hurt Sweden’s growth as early as next year, before becoming an increasing problem thereafter, as employers in the private and public sector struggle to find people with the right skills.
A decreasing local-born population means immigration will be needed to solve the shortage, the agency explained.
“Sweden’s birth rate is simply too low. The home-born population is reducing. To continue having the possibility of growing further, labour is needed, and therefore an increased population,” Johan Bissman from Arbetsförmedlingen told The Local.
The impact is already being felt by some companies, he noted, and the problem will grow in 2017.
“The shortage is already impacting the public sector and more businesses are going to feel the effects in 2017. A number of private companies are also affected currently, and that number is going to grow next year,” Bissman said.
“For the public sector the shortage means that the standard of service they provide is lowered, for example through lengthened processing times. For private companies, the shortage can lead to losing orders.”
Reducing the number of people leaving upper secondary school (gymnasium) before finishing their course and raising the retirement age (61-67, but traditionally 65) are ways to help alleviate the situation according to the employment agency, but it emphasized that immigration will still be needed for a long-term solution.
Part of the reason for Sweden’s situation is that the demand for goods and services has remained high as the country escaped relatively unscathed from the global economic crisis compared to other nations, the agency observed.
“It’s a complex situation. Sweden was well positioned in the economic crisis while other countries found developments more difficult. We recovered from it faster and therefore also found it easier to increase our rate of production,” Bissman said.
“Household consumption stood strong, which has an affect on demand. A weak krona has been and is good for the export industry as well as hospitality,” he added.