Swedish manufacturing expanded for the first time since July last month as exporters grew more confident of a recovery in debt-stricken Europe.
An index based on responses from about 200 purchasing managers rose to a seasonally adjusted 50.9 in February from 49.2 the previous month, Stockholm-based Swedbank AB, which compiles the index, said today. A reading below 50 signals a contraction. The average estimate of nine economists surveyed by Bloomberg was for a reading of 50.
“On the back of our view that the global economy will continue to pick up speed, we foresee a gradual improvement in the Swedish economy in the coming quarters,” said Anna Raman, an analyst at Nykredit Bank A/S in Copenhagen, in a note.
Sweden’s central bank kept its benchmark interest rate unchanged at 1 percent last month, after four reductions since the end of 2011 to support growth in the largest Nordic economy. The central bank predicted the economy will expand 1.2 percent this year, after growth of 0.9 percent last year.
“Manufacturers continued to revise up their production plans, and the sub-index for production indicated growth for a second month,” Swedbank said in a statement. “These could be signs that the manufacturing slowdown has bottomed out.”
The production sub-index rose to 54.8 from 53.8, while the order index climbed to 51.1 from 49.7. The employment index increased to 45.3 from 40.8. The production plan index gained to 57.9 from 54.8.
“I don’t see a massive upward trend from this point onward” since developments in Europe will be volatile, said Tina Mortensen, an analyst at Citigroup Inc. in London. “We’re still quite pessimistic on the outlook for Europe. I expect development of Swedish PMI to more or less mirror that.”