Sweden’s industrial orders grew for the first time in more than a year in February as production fell less than predicted, signaling the export-reliant economy is recovering from weak foreign demand.
Annual industrial orders rose 2.1 percent after declining a revised 5.7 percent the previous month, Stockholm-based Statistics Sweden said today, the first increase since January 2012. Industrial output fell an annual 0.9 percent in February, compared with a predicted decline of 1.9 percent, and a revised 8 percent the previous month.
“We expect industrial production to recover,” Torbjoern Isaksson, an analyst at Nordea Bank AB in Stockholm, said in a note today. “This is supported by the order intake that improved somewhat in February. However, the production level is still low and we expect the recovery to be slow.”
Sweden’s economy will grow by 1.6 percent this year and 2.6 percent in 2014, mainly because of increased domestic demand, Swedbank AB forecast today, raising predictions it made in January. This will prompt the central bank to elevate its main lending rate to 1.75 percent next year from 1 percent, Stockholm-based Swedbank said.
Sweden’s central bank has cut its main lending rate four times since December 2011 as the country, which exports about half of its output, has suffered from falling demand from Europe where countries are cutting spending to reduce debt. The Riksbank will announce its next rate decision on April 17.
Manufacturing confidence in Sweden’s $500 billion economy improved to its highest level in seven months in March. That followed better-than-forecast growth in the fourth quarter as the economy expanded an annual 1.4 percent.
Swedish industrial orders rose a monthly 3.5 percent in February compared with a forecast of 0.9 percent, Statistics Sweden said today. Production rose a monthly 0.5 percent.