A Titan of Swedish Industry Responds to ECB's Crisis Policies

(Bloomberg) -- One of the most powerful forces in Swedish business circles, Marcus Wallenberg, says the prospect of even more monetary stimulus in Europe has left him and others feeling less certain about the future.

“In a time when interest rates are being cut and you continue with economic stimulus, it’s probably a sign that things are not very, very strong economically; that makes business people wonder what’s going on,” Wallenberg, who chairs the boards of some of Sweden’s biggest companies, said in an interview on Friday at the Salzburg Summit in Austria.

Wallenberg is a member of one of Sweden’s most powerful investing families. Through a holding company, Investor AB, the Wallenbergs own major stakes in corporate giants such as Atlas Copco AB, ABB Ltd., AstraZeneca Plc, Electrolux AB and Ericsson AB. He spoke just one day after the European Central Bank made clear it’s preparing another round of monetary stimulus. ECB President Mario Draghi said on Thursday that the economic outlook is getting “worse and worse,” underscoring the need for policy makers to stay in crisis-fighting mode for longer.

ECB Signals More Stimulus

Firms inside the Wallenberg family’s holding company are already having to adapt to the more difficult environment, according to their latest quarterly results. ABB sold fewer industrial robots to car makers, and Electrolux has had to hike appliance prices to offset rising tariff costs. Finnish power-plant supplier Wartsila Oyj, also part owned by the Wallenbergs, recently warned that customers are delaying orders in response to the economic uncertainty.

“Many of the companies I follow are saying things are a little bit slower,” Wallenberg said. Despite the ECB’s dire warning, he also noted that “nobody is talking about a recession yet.” But the picture is “mixed,” he said.

“You see traditional industries seeing a slowdown, but you also see industries which have to invest in digitization and other types of technology like sustainability, there are areas where investments are still taking place,” Wallenberg said.

Trying to decipher the signals coming from the world’s biggest economies remains challenging, which puts business leaders in a difficult position when deciding on future investments.

“You get different economic data out of China, it’s the same in the U.S., so of course people are a little bit hesitant,” Wallenberg said. “Many are keeping up their R&D, but the business cycle has a lot do with the outlook, and how optimistic you are about the future, and there are many signals now that have made people more careful.”

Wallenberg mentioned the trade war between the U.S. and China as a key point of concern. The upshot is that businesses are holding back on investments they might otherwise have made. “It’s very sad that we are in this situation,” he said. “Businesses have to deal with the situation, it’s just the way it is, so some people are taking the more careful route now.”

“Our companies stand ready to adapt all the time,” Wallenberg said. “Many of these companies are run globally today and have facilities in China and the United States and in many different places. You never know whether you’re prepared, but people are much more aware that you have to stay on your toes.”

To contact the reporters on this story: Matthias Wabl in Vienna at mwabl@bloomberg.net;Niclas Rolander in Stockholm at nrolander@bloomberg.net

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net;Niklas Magnusson at nmagnusson1@bloomberg.net

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