The massive redundancies in banking and financial services seen in London and New York and elsewhere have yet to materialise in Sweden, despite a grim economic outlook.
Sweden’s finance minister Anders Borg predicted that unemployment rate will hit almost 12% in 2011, compared to an earlier forecast of 8.5% in 2010. In addition Borg expects GDP to fall 4.2% in 2009, compared to an end of January forecast which put the number at 0.8%, pushing Sweden towards what some believe will be the worst recession in Western Europe.
Hans Lager, chief executive of Lager & Partners in Stockholm, a recruitment company specialising in the finance and banking sector, says that in Sweden it is heavy industry and export related industries that are seeing and will continue to see redundancies at a large scale.
“Despite the negative economic news the financial services sector is not the worst hit, but Stockholm is not exactly a bright spot even if it has been spared the mass-redundancies”, he says.
Lager argues that because the large Swedish banks were less involved in the structured products and credit losses that have marred the US and UK banks, the outlook is slightly better.
However, Lager, the former head of UBS investment banking division for the Nordic region, warns that there may still be some surprises that could affect the domestic banks because of their businesses and exposure to the hard-hit Baltic region.
Mats Langensjö, head of the Nordic region for Pioneer Investments, the asset management firm, agrees and says there may be more redundancies to come as lately international companies have been overlooking their Nordic strategies and deciding whether or not their operations in the region are viable or not.
He believes there will be a wave of consolidation in the asset management industry in the short-term but innovation and need for new products will always lead to new entities being set up once there are some signs of recovery.
“Looking at the long term, with new regulations and a different world after the recession, Sweden needs more people with the right skill-sets in finance, so I am optimistic for the financial services sector,” he says.