Sweden's Q1 GDP growth pace likely to be significantly lower

Sweden's manufacturing production recovered somewhat in January. Data released , showed that Jan manufacturing production was up 4.6% y/y and by 0.6% m/m, below consensus at 5.7% and 0.7% respectively. Order intakes came out weak as the significant drop in December did not reverse in January.

Details showed a modest ongoing recovery in Sweden's manufacturing. Indicators suggest a continued recovery in the near-term, but the longer-term outlook is much more uncertain and depends ultimately on global developments.

"Today's data suggest that we will see a significantly lower GDP growth pace in Q1 that we had in Q4 2015. Nonetheless we still expect GDP to grow rather than contract in Q1." said Nordea Research in a report.