Swedish service sector and manufacturing industry record good production growth in June

The Swedish business sector saw good growth in June. However, the second quarter economic growth is expected to have been revised down, noted Noredea Bank in a research report. Business sector’s total production rose 0.3 percent sequentially in June, which was softer than anticipated. But the data for May was upwardly revised. On a year-on-year basis, production rose 4.1 percent, consistent with forecast.

Production in the service sector and in the manufacturing industry saw good growth, while production fell in the construction sector over the year. In the service sector, production rose 4.1 percent, while in manufacturing it rose 5.7 percent on a year-on-year basis. In construction, production fell 0.9 percent.

Order intake to the manufacturing industry has been soft so far in 2018 and fell further in June. This obviously raises some questions for the outlook of growth and whether uncertainty related to the trade war is impacting global demand.

Statistics Sweden based the second quarter GDP flash data mainly on the production data, stated Nordea Bank. The production data is on the soft side in relation to GDP, in spite of the sound readings in June. Significantly, the economy’s expenditure side is more subdued and indicate towards about 1 percentage point below GDP growth in the second quarter. Consequently, the very strong second quarter GDP growth data is still expected to be downwardly revised, added Nordea Bank.