Our comprehensive assessment of Sweden's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Sweden, as well as the latest industry developments that could impact Sweden's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Sweden before your competitors.
Sweden Country Risk
Sweden will remain a growth outperformer among developed states, with domestic demand remaining strong in 2016-17.
The surge in migrant inflows in 2015-16 will lead to higher economic growth over the medium term, but will present challenges to the fiscal accounts, the labour market, and domestic political stability.
Interest rates will remain low through 2017 as the central bank (Riksbank) will maintain a negative policy rate and disinflationary conditions will persist. However, there is an increasing chance of a policy reversal in 2016, as extraordinarily easy monetary measures are inappropriate given strong economic growth, incipient inflation, and rising private sector debt.
Major Forecast Changes
We now expect the Riksbank's...
Sweden Industry Coverage (11)
BMI View: We continue to believe that a growing economy and buoyant consumer confidence will ensure another positive year for Swedish new car sales in 2016, although sales growth may slow from the double-digit expansion seen over 2014 and 2015. We expect 4.8% growth for the sector as a whole, with passenger cars to outperform commercial vehicles.
|Passenger Car and Light Commercial Vehicle Sales|
|f = BMI forecast. Source: BilSweden, BMI|
Sweden Commercial Banking
|Date||Total assets||Client loans||Bond portfolio||Other||Liabilities and capital||Capital||Client deposits...|
Food & Drink
Sweden Food & Drink
BMI View: A consumer base with some of the strongest purchasing power in the world, combined with a favourable business and regulatory environment, will continue to be an attractive characteristic for food and drink companies operating in Scandinavia. That said, market concentration and a weak demographic outlook will limit growth for new entrants.
Latest Updates & Industry Developments
Throughout our forecast period to 2020, household spending will experience healthy growth in the Nordics, given...
Sweden Information Technology
BMI View: Sweden is both a high-value IT hardware market and has a favourable enterprise mix that is behind high levels of spending on software and services. Maturity limits the growth potential of the hardware segment, but purchasing power gains from kroner appreciation and replacement spending should keep the market in growth. Meanwhile, the software and services segments are forecast to outperform, with data analytics and cloud computing areas of strong growth, and we highlight the potential for Sweden to be a leading adopter of labour saving smart automation and assistant technologies as a result of high labour costs and its status as a leading innovator. For the IT market as a whole, BMI forecasts a CAGR of 4.2...
BMI View: A booming housing market, a strong major project pipeline, especially in rail transport and social infrastructure, backed by committed government spending make Sweden an attractive investment destination. Yet risks abound: the housing market is overheating, economic growth is cooling and Brexit is likely to hinder growth and demand in its key regional trading partners.
Latest Updates And Structural Trends
Sweden's construction industry is booming and easily outperforming the majority of developed states globally. We have significantly upgraded our 2016 and 2017 construction sector growth forecasts: from a previous 6.3% in 2016 and 5.6% in 2017, we now forecast 10.8% in 2016 and 7.6% in 2017.
BMI View: The insurance industry in Sweden is well developed - particularly the large life insurance market. In both the life and non-life sectors, the industry is highly competitive with domestic and regional providers dominating and leaving limited scope for new entrants. We do expect premiums to grow steadily over the coming years, based on our expectations for wider economic growth in the country as well as drives by providers to expand product offerings and distribution channels to further increase coverage. While some risk stems from regional economic uncertainty, overall the outlook for Sweden's insurance market remains positive.
Sweden Medical Devices
BMI Industry View: The medical device market is expected to experience moderate growth in local currency terms over the 2014-2019 period, although growth in US dollar terms will be constrained by a depreciation of the Swedish krona against the US dollar, which will result in a downturn in 2015 before the market returns to growth from 2016. While Sweden has a strong medical device manufacturing industry including a number of major international companies, the majority of domestically produced medical devices are exported, leaving the domestic market heavily reliant on imports.
Headline Industry Forecasts
We forecast the medical device market will grow at a CAGR of 2.7% in US dollar terms over the next five years, rising from USD2.5bn in 2014 to USD2.9bn in 2019. The low dollar growth rate reflects the falling value of the Swedish krona...
Pharmaceuticals & Healthcare
Sweden Pharmaceuticals & Healthcare
BMI View: Pharmaceutical companies will face an increasingly tough drug pricing environment in Sweden. The government will expand its use of pharmacoeconomic evaluations in order to provide appropriate justification of current expenditures and future investments in public healthcare, impairing the revenue earning opportunities presented by the growing demand for medicines.
Headline Expenditure Projections
Pharmaceuticals: SEK39.50bn (USD4.68bn) in 2015 to SEK39.67bn (USD4.66bn) in 2016; +0.43% in local currency terms and -0.4% in US dollar terms.
Healthcare: SEK376.25bn (USD44.61bn) in 2015 to SEK386.01bn (USD45.39bn) in2016; +2.6% in local currency terms and 1.6% in US dollar terms.
BMI View: This quarter we have revised our forecast for the nuclear power sector to reflect the impact of the tax on nuclear power generation, which was increased in 2015. Taking into account positive macroeconomic expectations for the Nordic region as well as sector trends, we continue to expect power consumption growth in 2016. Similarly, we maintain our long-held view that, while growth expectations in the region are improving, economic woes in the eurozone remain a major risk factor for the consumption and generation outlook of the country, as more regional...
BMI View: Telia Sweden is zero-rating social network usage (from Facebook, Instagram, Messenger, WhatsApp, Twitter and Kik) on its mobile network, meaning use of these sites will not count towards customers' data allowances, with no financial relationship between Telia and the social network companies. However, the free usage is contingent on the user behaving well on social networks, as Telia is concomitantly launching an anti-bullying campaign. While this will not have a high impact on Telia's network, its impact on the market will also be limited as social networking represents a only small part of data traffic.
BMI View: Sweden has a small but active tourism industry, attracting visitors from a range of regional and international markets. While much of the tourism industry is concentrated in Stockholm - which also boasts the most developed transport and accommodation infrastructure - tourism to other regions in the country is growing, and we are seeing more investment in second tier cities where there are greater opportunities for growth in a less competitive environment. Arrivals are expected to increase slowly over the medium term and the market will remain one of the smallest in the region, vulnerable to declines in both the eurozone and neighbouring Scandinavian states.