Swedish production in business sector rises above expectations in October, GDP growth likely to rebound in Q4

Swedish production in the business sector came in above projections in the month of October, suggesting a rebound in economic growth. Production in the total business sector grew 1.1 percent sequentially and 4.6 percent on a year-on-year basis in October. The September figures were upwardly revised.

The outcome was well above projections. Private services’ production rose sharply. Moreover, manufacturing production rebounded while the construction sector continues to be soft. Order intake to the manufacturing industry is rising gradually.

The upturn in production in October and the recent rise in the PMIs are encouraging and reduce fears of very soft GDP growth, noted Nordea Bank. Nevertheless, exports and retail sales have been weak in October. Therefore, the discrepancy between solid production figures and soft expenditure data continues.

“The bottom line is that GDP will probably recover in Q4 after the dip in Q3, although probably less so than the strong October production readings suggest”, added Nordea Bank.