Swede Unemployment Rise: Identifying Regions with Highest Joblessness in Sweden
In the second quarter of 2025, the Swedish county of Västerbotten experienced a significant increase in unemployment, primarily due to the downfall of the battery manufacturing sector. This industry's difficulties had a major impact on the local labor market, driving the rise in unemployment there.
According to the Swedish Employment Agency, while the national unemployment rose from 6.6% to 6.9% comparing Q2 2024 to Q2 2025, Västerbotten saw the largest increase in unemployment, strongly linked to troubles in battery manufacturing companies including layoffs and company failures.
Unemployment increased in 15 Swedish counties, but Västerbotten’s rise is notable due to the battery sector’s crisis, which is a regional concentration impacting local employment more severely than the national average. The highest overall unemployment rate remains in Skåne, but Västerbotten’s rise is noteworthy.
The National Institute of Economic Research (NIER) published a report predicting a decline in unemployment from the start of next year. However, the institute reduced its forecast for Sweden's growth in 2025 from 1 percent to 0.7 percent, blaming Swedes' lower than expected consumer spending.
The report measures unemployment differently than the Swedish Public Employment Service. The latter reported a total of 363,000 people registered as unemployed in Q2 2025, an increase from 344,000 in 2024. Household consumption is not growing as fast as the NIER believed it would.
The county of Västerbotten experienced the biggest rise in unemployment, with the number of unemployed people increasing from 4,992 in the second quarter of 2024 to 7,417 in the second quarter of 2025. Uppsala county also saw a sharp rise in unemployment.
In contrast, Norrbotten in the far north had the lowest unemployment rate, with only 3.8 percent of the workforce unemployed. Four counties in Sweden saw a decrease in unemployment: Dalarna, Gotland, Gävleborg, and Norrbotten.
The report does not specify any changes in unemployment rates for specific counties, but it mentions higher interest rates in Sweden. It's worth noting that Ylva Hedén Westerdahl, the head of forecasting at the NIER, admitted that they have been wrong about household consumption growth. Prices have risen by 30 percent in Sweden over the past three years, according to the report.
In summary, the significant increase in unemployment in Västerbotten in Q2 2025 is primarily caused by the downfall of the battery manufacturing sector due to bankruptcies and layoffs affecting the local labor market. The national unemployment rate is expected to decline from next year, but the economy is still facing challenges, including higher interest rates and rising prices.
- The sharp increase in unemployment in Västerbotten, as mentioned in the Swedish Employment Agency's report, is not just a general news item but a significant political issue given its impact on the local labor market and the battery manufacturing sector's crisis.
- The National Institute of Economic Research (NIER)'s report, which predicts a decline in unemployment from the start of next year, also highlights political concerns such as the reduction in Sweden's growth forecast for 2025, higher interest rates in Sweden, and the significant rise in prices over the past three years.
