The latest services indicator from Almega, the employer and trade organisation for the Swedish services sector, showed that there was an increase in employment in the private services sector for the fourth quarter when compared to the same time last year.

The Almega service indicator indicates that the growth rate for the private service sector output in the fourth quarter will be close to the previous quarter's growth rate, which was 4.4%, according to Statistics Sweden's service production index. If the service indicator may be right about the fourth quarter, this indicates that growth for 2016 will be close to last year's growth.

Despite the service indicator showing an increase for the fourth quarter, in practice, employment has already begun to fall, and Almega states that service companies need to hire more staff as private service providers are having difficulties finding staff.

According to Almega, Swedish companies are not able to recruit to the extent needed. Lena Hagman, chief economist at Almega said that the strained labour market situation means that employment growth is not as high as it could be.

Almega has previously warned that employment growth may be slowed down. Such an effect appeared to have begun in the previous quarter, when employment even declined from the second quarter. This has been done despite the fact that the companies have great need of labour.

“This could be a mismatch between demand and supply of skills, retirements and slow integration of immigrant labour that makes us see that the actual growth in employment did not follow the needs. This suggests that the labour market is not able to meet the demand that exists, and it suppresses the growth of employment,” Hagman said.

Several service industries have seen their growth slowed this year, while some industries that showed a weak performance in 2015 received a boost. Among these is private health care, which grew in the second quarter of this year.

“The only reasonable explanation we see is that there has been a strong pent-up need to meet increased demand for health care. Although the rate of growth was slightly weaker in the third quarter was clearly stronger than last year when the government investigation of private health care created uncertainty, Hagman said.

“The increased demand in the private sector may also be due to the historically huge shortage of staff in publicly-driven activities, including in healthcare,” Hagman said.