Nordic Manufacturing Stabilizes as Production Jumps
(Corrects name of bank in third paragraph in story first published on Feb. 1.)
Swedish and Norwegian manufacturing improved last month as production surged, signaling a revival in the two largest Nordic economies amid optimism European leaders have contained the euro area’s debt crisis.
Sweden’s purchasing managers’ index rose to a seasonally adjusted 49.2 in January from 44.6 the previous month, Swedbank AB (SWEDA), which compiles the index, said today. Norway’s index rose to 50.5 from 50, indicating manufacturing expanded for a third month, Danske Bank A/S (DANSKE) said. Readings above 50 signal an expansion. Analyst surveys estimated readings of 46.1 in Sweden and 50.4 in Norway.
“Today’s PMI reading indicates a faster and more promising manufacturing recovery than we’d forecast,” which “adds to our view that the Riksbank will take a pause in February,” Per Sellden, an analyst at Swedbank AB in Stockholm, said in a note. In Norway, increasing delivery times, falling inventories and rising orders “could indicate that production will rise going forward,” Danske Bank said.
Exports from the Nordic countries have fallen amid slowing demand from Europe where austerity measures in nations such as Spain have trigged a recession. Sweden relies on foreign sales for about half its output, while Norway, western Europe’s largest oil producer, sells 40 percent of its production abroad.
The Swedish krona gained 0.4 percent to 8.6027 per euro as of 11:09 a.m. local time. The Norwegian krone slid 0.3 percent to 7.4390 versus the common currency.
Sweden’s central bank cut its main lending rate a quarter point for a fourth time in a year in December to 1 percent, while Norway’s central bank in December left rates unchanged at 1.5 percent for a fifth meeting to support weak growth.
Sweden’s production sub-index rose to 53.8 from 45.3 while the order index rose to 49.7 from 41.3. The employment index rose to 40.8 from 40.5 and the delivery time index gained to 50.4 from 45.3. In Norway,
In Norway, the index measuring production rose to 50.4 from 49.5 while the order index rose to 51.3 from 49.9.
Swedish growth will recover to 1.1 percent this year after slowing to 0.9 percent in 2012 from 3.7 percent the previous year, the government predicted on Dec. 21. Growth in Norway’s mainland economy, which excludes oil, gas and shipping, is estimated to slow to 3 percent in 2013 from 3.75 percent last year, according to central bank forecasts.
A separate report today showed Norway’s unemployment rate rose to 2.7 percent in January from 2.4 percent in December, according to the Norwegian Labor and Welfare Service.
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