Sweden GDP likely to post below Riksbank’s forecast

Sweden manufacturing production recovered more than expected in August, even though the trend remains weak.  Figures for the private service sector in August were weaker than expected.

Manufacturing production recovered more than expected in August, even though the trend remains weak. Encouragingly, order intakes continue to rise. Order intakes on the domestic market shows a clear upward trend since March this year, while the trend in export orders has levelled out over the past few months. Indicators are rather mixed, but overall a gradual recovery is expected in the manufacturing sector going forward.

Figures for the private service sector in August were weaker than expected. Production declined somewhat over the month and increased by 1.9% y/y only. But indicators are rather upbeat and analysts see the weak readings in recent months as temporary.

Taken together the figures for manufacturing and private services suggest it might be a challenge to reach the Riksbank's forecast for Sweden GDP at 0.7% q/q and 3.0% y/y, says Nordea Bank.