“Those were really strong numbers. Arguably the economy is now back. Things have gone unusually fast, in a V-shape instead of the regular US, and it wasn’t a normal economic downturn either, it was a neat shutdown,” says Michael Grahn, Senior Economists at Danske Bank in Sweden, by Nyhetsbyrån Direkt.
According to the quarterly Swedish Statistics Index, GDP rose 1.1 percent during the first quarter and was essentially unchanged from the first quarter of 2020, which was stronger than expected in an InFront analyst survey. According to the monthly index, the economy in March returned again to higher than it was in February 2020, that is, the month before the Corona crisis had hit hard.
Anders Bergvall, Handelsbanken’s chief economist, also notes that the Swedish economy has recovered more than expected at the start of 2021, with GDP returning to pre-crisis levels.
“Sentiment indicators point to a continuous improvement in the economy,” he wrote in one of the market messages.
In KI’s business cycle gauge for April, the summary scale index rose to 113.4 from 105.8 in March, well above the normal 100 level. The industry continued to 121.0 despite all the talk about the semiconductor shortage and accelerating shipping costs, the confidence index Retail fully accelerated to 114.8 from 96.5, an increase of over 18 units.
“Just confirm it was very robust, with all sectors rising on the KI scale. No semiconductor shortages and container shortages can be seen in these numbers,” says Michael Grahn of Danske Bank.
All sectors of the economy showed increased confidence in April and is now at a normal level of 100 (construction industry) or higher (the rest).
The KI measure also showed the highest employment plans since 2017 and that labor shortages continue to increase, to just below normal.
At the same time, the price plans also showed increases, with Michel Grahn indicating that durable goods in the retail trade were marked by a significant increase.
“We’ll see where it goes. Anyway, there’s a little warning here about rising price pressure in the retail trade, although it remains to be seen if they can also charge higher prices. It cannot be said in general that this means that inflation is unraveling.” , He says.
Handelsbanken’s Andres Bergvall notes that the scale was also stronger than expected, with a widespread rise that also included the service sector.
In general, the KI scale indicates the continuous improvement of the Swedish economy in the future. But the services sector is still suffering from the effects of the restrictions and a decline in industrial production due to the global semiconductor shortage, which will impede the recovery in the second quarter. We do not expect the recovery to gain real momentum until the third quarter, when service consumption will begin to return to normal when the current social restrictions are eased. ”
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