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's status as an open trade-oriented economy means that its growth prospects will improve in 2016 amid a continued improvement in eurozone economic activity.
The 'December Agreement' signed in December 2015 by the minority coalition government led by the Social Democrats and the main opposition parties will maintain broad political stability until at least 2018.
Interest rates will remain low through 2017 as the central bank (Riksbank) will maintain a negative policy rate and disinflationary conditions will persist.
Major Forecast Changes
With economic activity weakening in the second half of 2015, we have lowered our real GDP growth forecast for Sweden to 2.6% from 2.7% for the year as a whole....
Sweden Industry Coverage (13)
BMI View: BMI maintains a bullish view on vehicle sales in Sweden, based on a strong rebound from pent-up demand following sustained declines in recent years, and a broad recovery in the economy. The primary driver of this growth is the passenger car segment, which we expect to increase 1.5% in 2015. We also expect to see a strong recovery in the country's commercial vehicle segment, and forecast a 6.1% increase over the year.
We expect this strong growth to continue into 2015, and we forecast 2.1% growth in total vehicle sales. The moderation in the rate of increase comes from higher base effects following the surge in sales volumes in...
Food & Drink
Sweden Food & Drink
BMI View: Boasting a consumer base of 25mn with some of the strongest purchasing power in the world and offering a favourable business and regulatory environment, the four Nordic markets could offer attractive investment opportunities. That said, there are limited opportunities for growth, as the economic and demographic outlook remains relatively grim. Moreover, the food and drink markets are highly concentrated, presenting significant challenges for new entrants.
Sweden Information Technology
BMI View: The Swedish IT market benefits from its strong local development of ICT companies, world-leading telecoms infrastructure and highly advanced economy. This evidenced by the performance of companies such as Zenterio, which is planning an IPO in 2015. Strong private consumption is expected to be the key growth driver in Sweden in 2015, with potential upgrade opportunities in this mature market. Meanwhile, we identify data centres, cloud computing and real-time business software and services as medium-term growth trends in Sweden. We also 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. BMI forecasts compound annual growth rate (CAGR) of 4.1% over 2014-2019 for the sector.
BMI View: Sweden's construction industry grew by 6.9% in 2015, after strong growth of 12.1% in 2014. This was still a healthy showing for a developed nation. The sector benefits from a robust residential infrastructure market, buoyant fixed investment and a strong transport infrastructure pipeline. Growth...
BMI View: Sweden's insurance sector is one of the most developed in Europe in terms of product innovation and underwriting and pricing discipline. While some areas of the market are already quite mature, the country's strong consumer-driven economy will support further growth in written premiums over the next few years, though we note that currency market fluctuation will affect USD-denominated growth in the short term.
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...
BMI View : The recent financial results reported by Sweden's largest steel producer, SSAB , are further evidence of an improving operating environment. After six consecutive quarters of negative results, the company returned to profitability in the first quarter of 2014 and has since shown further improvement in terms of its financial performance. The producer reported sales of SEK13.31bn (USD1.81bn) in Q314, up from SEK8.7bn (USD) in Q313. The firm posted operating profit, excluding items affecting comparability, of SEK510mn (USD69.31mn), operating cash flow of SEK77mn (USD10.46mn) and EBITDA of SEK1.25bn (USD169.86mn) in the reported quarter.
The recovery in SSAB's financial performance chimes with the stabilisation in Sweden's overall steel production volumes following the significant fluctuation...
Pharmaceuticals & Healthcare
Sweden Pharmaceuticals & Healthcare
BMI View: We continue to view Sweden as a moderately attractive regional market. The proportion of the country's pensionable population is on the rise and coupled with high per capita spending, multinational pharmaceutical companies will continue to be provided with steady revenue-earning opportunities. Such demographic trends will remain the primary driver of growth behind the prescription drug markets though we highlight that the government is likely to put further emphasis on promoting cost-reduction initiatives that would be supportive of the generic medicines market, which would see the market share of patented...
BMI View: This quarter our fundamental assumptions for Denmark, Finland and Sweden continue to be relevant. Taking into account relatively 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 three Nordic countries, as more regional instability ...
BMI View: We hold a quite muted view across the Nordics for this quarter - with opaque policy environments emerging in Finland, Denmark and Sweden, as the new governments chart out new courses for their energy policy. As all the countries are aiming to curb costs in their non-hydro renewables sectors segments, we expect growth to slow significantly from the levels of the previous decade.
BMI View: Most recent data from the regulator suggests that the LTE connections now account for 28% of the mobile market. As operators are making efforts in upgrading their networks, BMI believes that by the end of the forecast period 3G/4G subscriptions will account for more than 96% of the mobile market. However, higher revenues from increased data usage would be at least partially offset by reductions in mobile termination rates. In the wireline sector, strong growth for fibre services is fuelled by a demand for faster, higher capacity data services.
There were 14.664mn mobile subscriptions at the end of 2014, a little more than BMI had been expecting. Our long-term forecast has been extended to 2019 and foresees 14.732mn subscriptions by then.
Although the number of...
BMI View: We expect Sweden to receive a decreasing number of tourists in 2016 and into the medium term. This will mainly be a result of a fierce competition from neighbouring countries whose tourism marketing and infrastructure is deemed more adequate than Sweden's. The weak krona, however, will continue to attract a number of non-EU countries, including Asia Pacific countries and arrivals will be on the increase. As the country seeks to improve its infrastructure and sustainability in key tourism regions, we expect that this trend will be reversed by 2019.
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