Statistics Sweden’s indicator for production in the business sector came out somewhat stronger than forecast. Production rose by 1.0% on the month, compared to our call at 0.5%. The year-on-year figure was -0.8%, well above our forecast at -1.5%.
The only new data in today’s report is production in the construction sector, which rose swiftly by around 5% on the month as well as over the year. This was far stronger than forecast and explains the stronger than expected production reading for the total business sector.
Figures for manufacturing industry and private service sector were already known (-7.8% y/y and +1.2% y/y respectively).
The monthly production data covers more than 70% of the economy and is therefore an interesting indicator of GDP. Growth in the business sector has averaged -1.0% in July and August. There are favorable base effects for September, and the average year-on-year growth rate will probably be positive for Q3. In addition, the national accounts figures for the business sector have been stronger than the monthly readings. Thus, our call for Q3 GDP at +0.4% y/y seems to be in reach, perhaps even with some upside risks.
The Riksbank’s forecast for Q3 GDP, which was made before GDP was revised down for Q1 and Q2, is +0.9% y/y.
Details, production in the business sector, August:
y/y: -0.8% (Nordea -1.5%; prior -1.2% revised from -1.4%)
m/m: 1.0% (Nordea 0.5%; prior 0.1% revised from -0.6%)
Nordea