Swedish production in total business sector rises in March, construction activity likely to fall further

Swedish production in the total business sector came in line with projection, while the composition surprised. The total business sector production was flat on sequential basis, and rose 3.7 percent year-on-year in March.

However, the composition was slightly different, as the year-on-year figures for private services at 4.8 percent and manufacturing industry at 7.3 percent were above expectations, while production in construction sector fell more than forecast.

Production for the total business sector was downwardly revised for February. However, production rose by a sound pace of 0.9 percent sequentially and 4.4 percent year-on-year in the March quarter. But production data have overestimated growth the past year and figures for consumption and exports seem rather soft.

Therefore, it is quite early to conclude that the GDP growth will match the central bank’s projection for the first quarter of GDP at 0.6 percent and 3.5 percent year-on-year, stated Nordea Bank in a research report.

Going forward, construction activity is expected to fall further. Order intake to the manufacturing industry has levelled out, implying that growth is peaking in the sector. Meanwhile, private services are surprisingly resilient so far.

“All in all, we expected GDP growth to slow during the course of the year, which adds to the view of the Riksbank staying on hold for long”, added Nordea Bank.

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest