Swedish economy in sharp upswing

The Swedish economy is in a sharp upswing, with industry operating at high capacity utilisation during the second quarter and net exports hitting a record high of nearly 62 billion crowns, according to DI, citing new figures from Sweden Statistics (SCB).

“The upswing now is considerably broader and is spread among several sectors,” said SCB chief analyst Lena Hagman, noting that last year only the automotive and pharmaceutical sectors performed well.

The economy grew by 3.6 per cent in Q2 year on year, with net exports contributing most to the expansion, with 2.8 per cent.

But while DI was upbeat about the SCB figures, SvD and DN had a more cautious interpretation, reporting that the Swedish export industry was losing momentum. DN and SvD wrote that Swedish industries received far fewer orders in August. But while the rise in exports has begun to lose speed, domestic demand for industrial goods has increased, the papers wrote.

Stronger krona expected in 2005

The Swedish krona is expected to strengthen against the dollar and the pound next year, according to Föreningssparbanken which, at the same time, warns that the closure of Barsebäck could entail risks for the krona’s value.

Sweden’s large current account surplus is one reason behind the forecast of a strengthening krona. The country’s relative growth vis-à-vis the global economy is also seen as another positive factor for the Swedish currency.

However, the bank cautions that future company investments hinge on the price of oil. Thus an escalating and unstable oil price could dampen the krona’s strength.

SAS warns of further cutbacks, closures

SAS management plans to phase out or sell parts of its Swedish ground services, which employs 2,500 workers at 16 airports.

The new wage deal with 950 members of the Transport Workers Union has turned out to be too costly, according to SAS. Members of the transport union were also not entirely pleased with the wage deal, with some worried the agreement could cost them their jobs.

This developed as SAS faces declining passenger traffic and rising fuel prices, reports DI.

Sweden depends on nine corporate giants

Ericsson, Volvo Cars, AB Volvo, AstraZeneca, Saab Automobile, ABB, Stora Enso, Outokumpu and Sandvik comprise the nine major companies that are sustaining the Swedish economy, said DI this week, noting that these companies account for nearly half of Swedish exports. Exports, in turn, account for 45 per cent of GDP.

Sources: Dagens Nyheter, Svenska Dagbladet, Dagens Industri


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Corporate deals set to take off in Sweden in 2011: report

Sweden is one of the hottest markets in the Nordic region for corporate mergers and acquisitions, according to a new report.

Eight out of ten managers at large Nordic companies surveyed by business consultancy KPMG expected the M&A market in Sweden to grow in 2011.

Corporate deal growth in Sweden’s neighbours Denmark, Norway, and Finland, meanwhile, was only predicted by about 60 percent of the survey’s respondents.

The results of the survey are published as part of an annual review of M&A activity published by KPMG entitled Competing for growth 2011.

“We see that both venture capital firms and industrial firms are well positioned for even more business in 2011,” Christopher Fägerskiöld, head of M&A advising for KPMG Sweden, said in a statement.

According to Fägerskiöld, venture capital firms have had a difficult time selling their holdings during the financial crisis, leading to a pent up need to sell.

“At the same time, they need to show they can make acquisitions, not least those who plan on taking in money for new funds,” he said.

Last year, there were 158 deals in which companies from outside the Nordics bought a Nordic company, an increase of 48 percent.

“The most notable example was that Volvo Cars was sold to Chinese Geely,” said Fägerskiöld.

“It’s the first time that a privately owned Chinese company has bought a large and well-known western European company. It may very well pave the way for similar acquisitions.”

Respondents to the survey singled out China as the non-Nordic country that will likely carry out the most deals in the Nordic region in 2011, followed by Germany and the United States.

“We see a large interest from Swedish industrial companies to strengthen their position in Asia by acquisitions or cooperation with local companies,” said Fägerskiöld.

Many companies feel pressure to act so that the competition doesn’t get to China first.”