Coronavirus strikes against Swedish economy

- The problem I see in front of me is that some time-critical goods do not arrive because the flights do not go, says Johan Woxenius, professor of industrial and financial economics at the University of Gothenburg.

He recalls that the city most affected by the corona virus - Wuhan, in the Chinese Hubei province - has more inhabitants than the whole of Sweden.

- And there is, above all, a large automotive industry there. What can affect us in the short term is whether in our production systems we have individual electronic components that fly here and that we depend on to complete a car or machine, he says.

Patrik Tingvall, chief economist at Kommersollegium, finds it difficult to assess the situation because of all the uncertainty about the virus. For Swedish, he is also worried about how the automotive industry. can be affected.

Precisely Hubei Province with Wuhan has attracted a large number of major international car manufacturers, whose production has been cross-sectional. The problem can easily be exacerbated by the long production chains, in many ways.

- Deficiencies in one segment will have an impact further down the value chain and because we have such an integrated world economy, the effects can be magnified, says Tingvall.

The electronics industry is also badly off. Swedish industry players met as late as Monday for an extra session, among other things to discuss the challenges created by the corona virus.

Among other things, it is about the import of smart phones. In practice, all iPhone manufacturing is done in China and Apple has previously announced that it has closed down stores and offices and has limited operations at its factories in China.

- It is feared that there will be delivery problems later on. Then it is different depending on the mode of transport. By boat, deliveries are already on the way and then the problems arise later. On the other hand, when it comes to goods sent by air, you see earlier risks, says Klas Elm, CEO of the Electronics industry to TT.

However, Mats Kinnwall, chief economist at Teknikföretagen, fades down the risk of serious consequences.

- Of course, economic life can stop completely in that city and state. But often there is only one notch in the curve. What you couldn't buy in September you got to buy in October, and what you couldn't produce then you had to produce the next quarter.

At the same time, Stefan Westerberg, senior economist at the Stockholm Chamber of Commerce, warns that the corona virus may have consequences for Swedish retail.

- Take, for example, Clas Ohlson or Kjell & Co, which works very much with the sale of products produced in China. There is a real risk that they will suffer.

Sweden's trade exposure to China is great. Sweden's imports from China lifted by 11.5 percent to SEK 80.1 billion in 2018, according to statistics from Kommersollegium. This means that during that year China was the country of origin to 5.4 per cent of all Swedish goods imports.

"The fact that China has shut down a significant part of its economy will have real consequences in the long run," says Westerberg.

Another sector that is afflicted in Sweden will be the hospitality industry. In January-February last year, the number of guest nights with Chinese citizens was 32,000 guest nights, of which about 18,000 were in Stockholm. With travel bans and canceled flights, it is natural for this figure to be adversely affected, according to Westerberg:

- Chinese tourism has become an increasingly important part of tourism in Sweden. We believe that the number of guest nights from China will be significantly lower in January-February this year.