Sweden posts gains in industrial output

Sweden reported significant gains in industrial output in May, mirroring improvements elsewhere in Europe, according to new figures released on Friday.

Swedish output rose 2.3 percent in May from the previous month and 12.4 percent compared with May 2009 for the largest annual rise since 2000, according to Statistics Sweden (SCB)

The agency said the annual gain was driven by the automobile sector and base metals.

Sweden emerged from recession last year and recorded growth of 1.4 percent in the first quarter of 2010 compared with the previous three months.

The government forecasts the economy will grow 3.3 percent this year.

The Swedish figures followed further positive developments in Scandinavian and elsewhere in Europe.

In Finland, industrial production, powered by the metals industry and forestry products, jumped 11.3 percent in May compared with the same month last year and 1.5 percent from April, according to the Finnish statistics office.

Finland suffered during the global financial crisis, with demand for its key products — paper and mobile telephones — plunging.

While a rebound is foreseen for this year, Finland in June fell back into recession after two consecutive quarters of negative growth.

Earlier Friday, France reported a 1.7 percent gain in industrial output in May from the previous month, although analysts cautioned that the outlook remained weak.

Italy said its industrial output grew twice as fast as expected in May, up 1.0 percent from April.

But in Greece, grappling with a debt crisis and a stiff austerity programme, industrial production fell 4.9 percent in May after a year-on-year fall of 5.1 percent in April, according to the national statistics authority.

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Sweden’s growth ‘better than expected’

Sweden’s gross domestic product grew 2.6 percent in the second quarter of 2014 compared to the same period a year earlier, with the economy performing much better than previously thought.

Sweden’s growth 'better than expected'
Strong household consumption is helping Sweden's growth. Photo: Mona-Lisa Djerf/SvD/TT

The second-quarter figures from Statistics Sweden (SCB) also showed GDP up 0.7 percent compared to the first quarter.

The news will come as a boost for the Prime Minister elect, Stefan Löfven, as the agency revised its preliminary figures for the quarter upwards by 0.7 percentage points.

Financial experts have expressed concern over the “fog of uncertainty” brought on by political instability in a hung parliament.

Sweden’s currency, the krona, took a small hit in the immediate aftermath of Sunday’s election.

Election puts Sweden in 'fog of uncertainty'

“To some extent SCB had expected an increase since the preliminary figures come out so early,” Mats Dillén, director-general of the National Institute of Economic Research (NIER), told The Local.

“But it is still better than they expected and, to be honest, it’s also somewhat stronger than we had anticipated.”

Mats Dillén said the strong growth was fuelled partly by levels of household consumption that were “very strong in a European perspective.”

Investments in the housing sector were also having a positive effect, he said.

The export sector however remained sluggish, due mainly to low demand in the eurozone.

NIER was sticking to its general prognosis for the year, Dillén said, with early third-quarter figures showing that Swedish exports and a eurozone recovery were both “standing still somewhat”.

For Stefan Löfven the figures will provide some welcome impetus as he seeks to form a government but Dillén said the autumn slump meant the finance ministry would not get over-excited.  

As for next year, “most observers expect there to be more growth allied with falling unemployment,” but OECD figures showing slow growth in the eurozone meant prospects remained “quite uncertain”, said Dillén.