Disappointing Swedish Production Data Points to Weak GDP Growth

(Bloomberg) -- Go inside the global economy with Stephanie Flanders in her new podcast, Stephanomics. Subscribe via Pocket Cast or iTunes.

Swedish private-sector production unexpectedly slowed in March, adding to a slew of data pointing to a poor first quarter for Scandinavia’s biggest economy.

According to Statistics Sweden, production was up an annual 1.1 percent, compared with a revised reading of 2.1 percent in February. Analysts surveyed by Bloomberg had expected an annual increase of 1.8 percent.

Key Insights

• A breakdown of the data showed that production dropped an annual 1.3 percent in industry and rose 0.3 percent in the services sector. A majority of the industrial subsectors presented negative development on a monthly basis, in seasonally adjusted terms.
• Among the industrial subsectors, the largest decrease was in the industry for motor vehicles, down 21.3 percent compared with February.
• Tuesday’s data follows last week’s decline in manufacturing PMI for April.
• The Swedish krona declined to its lowest level in a decade against the euro on Monday amid renewed anxiety about a global trade war and concern that the slowdown in the Scandinavian economy is deepening.

What Economists Say

• The production value and orders were “weaker than expected,” said Jesper Petersen at Danske Bank, adding that the data is negative for Sweden’s first quarter outlook
• Oscar Andersson at Swedbank said that the 1.1 percent annual rate indicates a “leveling off” and that negative industrial orders reading is suggesting a slowdown ahead.

Get More

• For more details, see this table

To contact the reporter on this story: Rafaela Lindeberg in Stockholm at rlindeberg@bloomberg.net

To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net, Nick Rigillo

©2019 Bloomberg L.P.