Sweden
In-depth country-focused analysis on Sweden's economic, political and operational risk environment, complemented by detailed sector insight

Our comprehensive assessment of Sweden's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Sweden, as well as the latest industry developments that could impact Sweden's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Sweden before your competitors.

Country Risk

Sweden Country Risk

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Core Views

  • Sweden's status as an open trade-oriented economy means that its growth prospects will depend heavily upon a continued recovery in the rest of Europe.

  • The outlook for business investment and exports is waning alongside a renewed slowdown in the eurozone economy.

  • With the outcome of the September 2014 election very likely to be a coalition government led by the Social Democrats, we expect a shift in government policy toward greater state interventionism. Such changes are likely to include tax hikes and a rise in government spending.

Major Forecast Changes

  • We have revised down our 2014 real GDP growth forecast to 1.9% from 2.5%, but have upped our 2015 projection to 2.5% from 2.4%.

Key...

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Sweden Industry Coverage (10)

Autos

Sweden Autos

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BMI View:  BMI maintains a bullish view on vehicle sales in Sweden, based on a strong rebound from low base effects due weak sales in 2013, pent-up demand following sustained declines in recent years, and a broad recovery in the economy. The primary driver of this growth is the passenger car segment, which we expect to increase 18% in 2014. We also expect to see a strong recovery in the country's commercial vehicle (CV) segment, and we forecast a 15% over the full year.

BMI expect to see a marked increase in Sweden's vehicle production in 2014. Much of this is driven by strong export growth, primarily passenger cars to the resurgent European market. Established manufacturers Volvo and Saab produce the lions' share of vehicles in the country, alongside a handful of high-end, low volume domestic carmakers, such as Koenigsegg, Esther, and Coresto....

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Food & Drink

Sweden Food & Drink

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BMI view:  We believe the Nordics food and drink market will be picking up growth after the difficult 2012 and 2013. Increasing consumer focus on health and wellness will drive the sales of natural and high quality food products, which are expected to outperform over the forecast period to 2018. That said, we note that subdued   consumer outlook and uncertain economic environment will continue to limit the overall region's potential.

Key Forecasts

Denmark

  • 2014 total food consumption value (local currency) growth (year-on-year) in Denmark: +4.0%; compound annual growth rate (CAGR) to 2018: +4.9%

  • 2014 total soft drinks value sales...

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Information Technology

Sweden Information Technology

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BMI View:   W e made a small downward revision to the growth outlook for Sweden's IT market in 2014 in the Q4 update to reflect the weaker economic forecast from our Country Risk team. Even prior to the downgrade, growth was forecast to significantly underperform emerging markets in the region over the medium term , due to market maturity. Despite short-term challenges , the market will remain highly lucrative and there are many positives including a strong local system of software firms and the coverage and capacity of supporting data network infrastructure. Meanwhile, we identify data centres, cloud computing, and real-time business software and services as medium-term growth trends in Sweden. We also highlight the potential for...

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Insurance

Sweden Insurance

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BMI View:   Shaped by Sweden ' s comprehensive and well-regarded retirement income system, and by the country ' s status as the largest of the Nordic economies, the insurance sector has enormous strengths. Although they differ in terms of their corporate constitution, product/segment focus, preferred distribution channels and histories, all of the leading non-life and life/pensions companies are leveraging brands to deliver superior outcomes to policy-holders: they are doing so in a sustainable and profitable way. The main challenge, though, is that both segments are mature. Sweden is a classic example of a market where premiums will only develop slowly through the forecast period, but where clients and shareholders/stakeholders will be satisfied.

Sweden's life insurance segment...

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Medical Devices

Sweden Medical Devices

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Espicom Industry View: The medical device market is expected to experience moderate growth in local currency terms over the forecast period   but growth in US dollar terms will be constrained by a depreciation of the Swedish kron a against the US dollar. Although Sweden has a strong medical device manufacturing industry including a number of major international companies, the majority of domestically produced medical devices are exported, leaving the domestic market heavily dependent on imports.

Headline Industry Forecasts

  • The medical device market in 2013 was estimated at US$2,541.1mn, equal to US$265 per capita, and equivalent to 4.8% of total health expenditure, 0.4% of...

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Metals

Sweden Metals

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BMI View : BMI's Q 4 2014 Sweden Metals report examines the trends within the country's steel and aluminium sectors and assesses the challenges facing the industry's key players as they look to recover from the downturn in metal demand and prices over the past few years.

The decline in Sweden's steel production appears to have bottomed out. After contracting by 11.5% year-on-year (y-o-y) in 2012, output grew by 1.8% in 2013 and growth is forecast to accelerate to 3.9% this year.

Following six consecutive quarters of decline, SSAB, the country's largest steel producer and a key bellwether for the market saw a return to profit growth in the first half of 2014 and the firm has raised prices on shipments to the US during the second half of the year. The company's position has been further strengthened by...

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Pharmaceuticals & Healthcare

Sweden Pharmaceuticals & Healthcare

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BMI View : As Sweden 's population grows older and demands for healthcare provision increase, the government is facing a concerning scenario of rapidly increasing expenditure on medical services. Restricting innovative drugmaker revenue streams while increasing the use of affordable generic medicines offers a partial solution to the problem, as does encouraging the consumption of older medicines over newer, higher-value medicines.

Headline Expenditure Projections

  • Pharmaceuticals: SEK36.28bn (USD5.70bn) in 2013 to SEK36.41bn (USD5.36bn) in 2014; +0.38% in local currency terms and -5.9% in US dollar terms.

  • Healthcare: SEK351.16bn (USD55.18bn) in 2013 to SEK360.12bn (USD53.03bn) in 2014; +...

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Power

Sweden Power

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BMI View:   With   our fundamental assumptions for the three Nordic markets covered in this report unvaried,   our forecasts for their power sectors remain largely unvaried this quarter .   Overall, we maintain our view that , while growth expectations in the region are improving, economic woes in the eurozone remains a major risk factor for the consumption and generation outlook of the three Nordic countries, as more pronounced financial stresses could undermine their economic...

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Renewables

Sweden Renewables

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BMI View :   We are maintaining our forecasts for non-hydropower renewable energy generation in the Nordics this quarter as key projects in the region continue to progress in line with our expectations. We note that Denmark appears to be losing its energy self-sufficient status, and this is likely to lead to a greater focus on the development of renewables.

We are maintaining our 2014 forecasts for non-hydropower renewable energy generation in the Nordics this quarter. This is because key projects in the region continue to progress in line with our expectations. For 2014, we are forecasting non-hydropower renewable generation to grow by 5.9% in both Denmark and Sweden and by 2.5% in Finland.

We have also maintained our long-term forecasts for non-hydropower renewable generation in the region this quarter. We expect non-...

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Telecommunications

Sweden Telecommunications

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D espite Sweden being one of the most advanced telecoms markets, BMI believes that the market has passed its saturation point and any subscriber growth will come from cannibalising the shares of existing operators. However, growing data usage could help the operators grow their profit margins despite the relatively stagnant subscriber numbers and lower income from traditional voice and other non-data services. The purchase of Tele2's consumer broadband and VoIP business by Telenor gave that company a welcome boost in scale, but it remains to be seen whether it can fully capitalise on the opportunities presented by converged services. Tele2, on the other hand seems to be focussing more on M2M services.

Key Data

  • The latest operator data for Q214 show that the mobile market reached 14.488mn users for a...

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