Production in Sweden’s manufacturing industry improves in July

Production in Sweden’s manufacturing industry and in the private service sector improved in July and beat expectations.  On a year-on-year basis, manufacturing production grew 4.2 percent, as compared with consensus expectations of 3.5 percent. This is a sharp improvement from prior month’s decline of 1.4 percent. On sequential basis, it rose 1.1 percent in the month, above consensus projection of 0.5 percent.

The growth in manufacturing production is encouraging; however the trend continues to be weak. The solid year-on-year figure is mostly due to base effects and is expected to fall again in the months ahead, noted Nordea Bank in a research report. However, order intake came in robust and implies that production would pick up. Order intake increased 5.2 percent year-on-year and 0.7 percent month-on-month.

Service sector production grew surprisingly by 5.3 percent year-on-year in July, as compared with June’s growth of 3.8 percent. On a month-on-month basis, service sector production rose 0.8 percent, as compared with prior month’s 0.1 percent growth.

Overall, the monthly data indicates towards a good beginning in the third quarter. Particularly the domestic economy is showing surprisingly sound growth, while the order intake implies that there is hope for the manufacturing industry too, according to Nordea Bank.