Nordic Countries

Companies in Sweden, Norway, Finland and Denmark remain active, with business operations maintaining a steady pace. However, concerns about potential legislative changes are looming over the market, with many players uneasy about the lack of clear guidance from the authorities. 

Despite this, market sentiment is relaxed. This positive mindset can be attributed to the steady flow of business, which has been much more stable after the summer than had been anticipated. However, there is less material in the market and so everyone is really pushing on price to obtain every tonne available, thus making competition tough. And there are underlying fears of a long and slow winter, with potential demand stagnation based on, among other factors, negative signs from the production industry.

Finland is slowly emerging from a recession, with falling interest rates and low inflation boosting domestic demand. However, the risk of rising unemployment continues to dampen consumer confidence; unemployment is expected to increase slightly in the short term. Export orders remain weak, although growth in export markets should improve demand over time. The housing market has stabilized, with an increase in transactions, but housing construction is not expected to recover until 2025. Despite the government’s fiscal tightening efforts, public debt continues to grow, potentially leading to more austerity measures. Wages are rising faster than in previous years, and the economy is projected to experience stronger growth in 2025 as domestic demand and exports gradually recover.

Norway’s short-term economic outlook shows that growth is below-trend, although some acceleration is expected by 2025. Consumer spending is relatively high compared to incomes, limiting further increases. Norges Bank plans to keep the current interest rate steady, with potential rate cuts in 2024 depending on domestic and global conditions. While business and residential investment may be improving, the outlook for the construction industry remains weak for next year. The labour market is tight but unemployment is continuing to rise. Imported inflation has been lower than expected and inflation is falling.

The Swedish economy performed well in the first half of this year despite weaker consumption and fewer hours worked. Housing construction is showing signs of recovery and prices are slowly rising. Business investments and foreign trade are increasing, although there has been a temporary slowdown in the former. Employment remains stable but unemployment is rising. Going forward, monetary and fiscal policies are expected to support growth. Sweden’s Riksbank is thought likely to lower the key interest rate at each meeting until March 2025, aiming for a policy rate of 2% by the summer of 2025, as inflation has been falling and is projected to remain below the target level.

Denmark’s economy continues to be driven by its pharmaceutical sector, although other areas are also making progress. Consumers have been cautious about spending wage increases after depleting their savings during the period of high inflation, but this trend is expected to reverse. Danish consumers are in a relatively strong position as inflation has been lower than in many other countries. However, exports outside of the pharmaceutical sector have faced challenges owing to a slowing global industrial recovery.

Inflation remains low but is starting to rise, influenced by technical factors and significant wage growth. Modest increases in house prices are expected, although there is a risk of declines in high-priced areas, particularly Copenhagen.