Sweden

In-depth country-focused analysis on Sweden's economic, political and operational risk environment, complemented by detailed sector insight

Sweden

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.

Country Risk

Sweden Country Risk

BMI View:

Core Views

  • 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

  • With higher-than-expected real GDP...

Sweden Industry Coverage (20)

Autos

Sweden Autos

BMI View:

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
(2014-2020)
f = BMI forecast. Source: BilSweden, BMI

...

Commercial Banking

Sweden Commercial Banking

BMI View:

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Food & Drink

Sweden Food & Drink

BMI View:

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...

Information Technology

Sweden Information Technology

BMI View:

BMI View: Despite its developed market status, we have an upbeat perspective on Sweden's IT industry, owing to the presence of a supportive economic environment and advanced composition of the enterprise segment. These market characteristics are expected to drive growth in spending on new technologies such as advanced cloud computing services, and software and services required for the Internet of Things. 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. However, this trend would be concentrated in the latter years of our forecast. Meanwhile, despite its maturity, we believe there to be opportunities in the retail market where strong private consumption growth has the...

Infrastructure

Sweden Infrastructure

BMI View:

BMI View: A booming housing market, a strong major project pipeline, especially in the rail transport, and committed government spending make Sweden an attractive investment destination. A further boost is expected from the surge in immigration and the pressure this will put on housing demand and how this will affect an already overheating housing market.

Latest Updates And Structural Trends

  • As immigration soars in Sweden, 300,000-500,000 more homes may be needed by 2020, providing a significant boon to the already healthy residential construction sector.

  • The transport network is the focus of investment under the 2014-2025 national infrastructure plan, with USD76bn allocated to transport network improvements.

  • Sweden's construction industry growth is slowing, but it is...

Insurance

Sweden Insurance

BMI View:

BMI View: The latest news flow confirms our view that Sweden's life insurance sector will continue to grow faster than nominal GDP through the forecast period, with the result that life penetration rises from what are already very high levels of about 6% of GDP. By contrast, price competition will constrain the expansion of premiums within the property and motor vehicle insurance sub-sectors and, therefore, across the non-life segment as a whole.

Headline Insurance Forecasts (Sweden 2013-2020)
2013 2014 2015e...

Medical Devices

Sweden Medical Devices

BMI View:

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...

Metals

Sweden Metals

BMI View:

BMI View: We have increased our 2016 tin price forecast to USD16,500/tonne owing to a stabilisation in the Chinese economy over Q116 that has boosted all industrial metal prices significantly over January-April. While we expect consolidation over the remainder of 2016, tin prices will continue to recover beyond 2016 as the global market posts sustained market deficits and inventories dwindle.

Global - Tin Supply, Demand & Price Forecasts
2014 2015e 2016f ...

Sweden Metals

BMI View:

BMI view: We have revised our aluminium price forecast from USD1,575/tonne to USD1,600/tonne in 2016, as the tightening market provided an earlier than expected floor in Q116. Aluminium prices will gradually edge higher as the global market moves into a deficit by 2018.

...
Global - Aluminium Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f

Sweden Metals

BMI View:

BMI View: Despite the strong H116 iron ore price rally, prices will edge lower due to weakening Chinese consumption over the latter half of 2016. From 2017 onwards, iron ore prices will remain subdued as iron ore prices remain under pressure from an over-supplied seaborne market, driven by strong production growth in Australia and Brazil, and weak consumption growth in China.

...
Global - Iron Ore Production Forecasts
2013 2014 2015e 2016f

Sweden Metals

BMI View:

BMI View: Nickel prices will bottom in 2016 as weak production drags the global market into deficit. For instance, we expect Chinese imports of nickel to grow over the coming quarters. Prices will begin 2016 weaker than we had previously expected and we have thus revised down our 2016 average price forecast to USD9,000/tonne from USD10,500/tonne.

...
Global Nickel Forecasts
2013 2014 2015e

Sweden Metals

BMI View:

BMI View: We have revised down our average copper price forecast for 2016 to USD4,900/tonne. We expect prices to find a floor over the first half of 2016, and begin to stabilise thereafter, supported by production cuts and modest consumption growth.

Global - Copper Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f 2018f ...

Sweden Metals

BMI View:

BMI View: We have raised our gold price forecast for 2016 to USD1,275/oz and have a new five-year price target of USD1,400/oz. We have turned more positive towards prices due to rising inflation pressures and our view that real rates will remain depressed in developed markets beyond 2016. A modest rise in prices will be insufficient to reverse the trend of weak mine investment and industry consolidation.

BMI Gold Forecasts
2014 2015 2016f ...

Sweden Metals

BMI View:

BMI View: Global steel prices will remain subdued due to a persistent steel oversupply over the coming quarters. From 2017 onwards, steel prices will gradually edge higher as the global steel surplus will narrow due to Chinese supply moderation.

Steel Price Forecast
2014 2015 2016f 2017f 2018f 2019f...

Sweden Metals

BMI View:

BMI View: We maintain our average zinc price forecast for 2016 of USD1,750/tonne. We expect zinc prices to reach a floor over the first half of 2016, and begin to stabilise thereafter, as production cuts shift the market to a deficit.

...
Global - Zinc Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f 2018f

Sweden Metals

BMI View:

BMI View: Lead prices will gradually edge higher as the global lead market will shift into deficit by 2017 as production growth will slow over the coming years.

...
BMI Lead Price Forecast
Current* 2016f 2017f 2018f 2019f 2020f

Pharmaceuticals & Healthcare

Sweden Pharmaceuticals & Healthcare

BMI View:

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.

Headline Pharmaceuticals & Healthcare...

Power

Sweden Power

BMI View:

BMI View: This quarter our fundamental assumptions for 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 country, as more regional instability...

Telecommunications

Sweden Telecommunications

BMI View:

BMI View: Saturation in Sweden's telecoms market means operators are looking to diversify their product portfolios to find new revenue streams. With the ongoing shift from fixed solutions to mobile services, operators are increasingly turning towards the Internet of Things and connected products, such as cars, to drive growth. However, the success of these solutions in increasing average revenue per user (ARPU) may be limited unless they are bundled as part of shared data plans.

Latest Updates & Industry Developments

  • Mobile subscriptions will reach 14.4mn in 2016, at a penetration rate of 145.8%, indicating the saturation of the market.

  • The broadband segment continues to experience modest growth, with 5.7mn...

Tourism

Sweden Tourism

BMI View:

BMI View: Sweden has a well-regulated and stable tourism sector. Legislation is clear and effective and in recent years the infrastructure has been developed to improve travel throughout the country. The biggest problem faced by the sector is its size. Compared to other European destinations, Sweden's inbound arrivals are extremely low, severely limiting the potential for financial returns and, in the longer term, growth. Historically, Sweden has been reliant on regional travel from its neighbouring Scandinavian countries; however, this has been severely impacted by the downturn in global oil prices. Over the forecast period, modest growth is expected with visitor numbers expected to pick up slightly. The hotel sector is far from saturated and...

Latest Sweden Articles

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Latest Sweden Blogs

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Latest Sweden Podcasts

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