Swedish production in business sector eases in January

Swedish production in the business sector eases in the month of January and the year-on-year figure dropped noticeably. The five months rise in the production business sector ended in January. Sequentially, production dropped 0.7 percent, while it fell 2.1 percent on a year-on-year basis from December’s rise of 5 percent.

Production in the private sector has levelled out in recent months and dropped in January. There was rise recorded in construction, but possibly only temporary. Production in the manufacturing industry rose in January and is holding up better than anticipated so far.

Swedish GDP growth accelerated in the fourth quarter to 1.2 percent quarter-on-quarter due to an unexpected surge in exports, while domestic demand was soft and weaker than anticipated. The sluggish reading for private services is an indication that the domestic economy continued to show sluggish growth at the start of the year, which is a source of concern for the Riksbank. Furthermore, the rise in manufacturing industry and in construction might be temporary.

“PMIs picked up in February, while confidence in the business sector has eroded according to the NIER’s Business Tendency Survey. In all, GDP growth is slowing but not in any dramatic way so far”, said Nordea Bank in a research report.