The latest Capacity Utilization figure for Sweden, released on November 21, 2025, shows a decline of 0.20% quarter-on-quarter (QoQ), according to the Sigmanomics database. This result falls short of the 0.20% consensus estimate and reverses the upward trend seen in the previous two quarters. The reading also contrasts with the 12-month average of -0.10%, indicating a modest contraction in industrial capacity use over the past year.

Drivers this month

• Manufacturing slowdown amid weaker export orders.
• Supply chain bottlenecks persisting in key sectors.
• Reduced energy-intensive production due to higher costs.

Policy pulse

Sweden’s central bank has maintained a hawkish stance, keeping the repo rate elevated to combat inflation near 3.50%, above the 2% target. The capacity utilization dip signals potential slack, complicating the inflation outlook and monetary policy calibration.

Market lens

Immediate reaction: The SEK weakened 0.30% against the EUR within the first hour post-release, reflecting concerns over industrial momentum. Short-term bond yields edged down slightly, pricing in slower growth expectations.

Capacity utilization is a key macroeconomic indicator reflecting the extent to which Sweden’s productive resources are employed. The November 2025 reading of -0.20% QoQ follows a mixed history: a peak of 0.70% in February 2025 and troughs of -1.30% in February 2024 and -0.90% in November 2024. This volatility underscores cyclical pressures and external shocks impacting industrial output.

Monetary Policy & Financial Conditions

Riksbank’s ongoing rate hikes have tightened financial conditions, with the repo rate at 3.75%. Credit growth has slowed, and corporate borrowing costs have risen, dampening investment and capacity expansion. Inflation remains sticky, driven by energy prices and wage growth, complicating the policy outlook.

Fiscal Policy & Government Budget

Sweden’s fiscal stance remains moderately restrictive, with a government budget deficit of 0.80% of GDP in 2025. Public investment in infrastructure is steady but cautious, limiting stimulus effects on capacity utilization. Social spending pressures persist amid demographic shifts.

External Shocks & Geopolitical Risks

Global trade tensions and supply chain disruptions, especially in electronics and automotive sectors, continue to weigh on Sweden’s export-driven industries. The ongoing geopolitical uncertainty in Eastern Europe and energy market volatility add downside risks to industrial activity.

Drivers this month

• Decline in manufacturing output, especially in machinery and automotive sectors.
• Energy price volatility leading to cautious production scheduling.
• Persistent supply chain delays reducing operational throughput.

Policy pulse

The capacity utilization decline signals potential slack that may ease inflationary pressures, possibly influencing Riksbank’s next policy moves. However, the central bank remains vigilant amid global uncertainties.

Market lens

Immediate reaction: Swedish krona (SEK) depreciated 0.30% versus the euro, while 2-year government bond yields fell by 5 basis points, reflecting increased growth concerns.

Looking ahead, Sweden’s capacity utilization trajectory will hinge on several factors. The baseline scenario (60% probability) anticipates modest growth of 0.10-0.30% QoQ in early 2026, supported by stable domestic demand and easing inflation. The bullish scenario (20% probability) envisions a stronger rebound (0.50% or more) driven by improved global trade and supply chain normalization. Conversely, the bearish scenario (20% probability) foresees further declines (-0.50% or worse) due to prolonged geopolitical tensions and energy price shocks.

Monetary Policy Outlook

Riksbank may pause rate hikes to assess growth risks but remains ready to tighten if inflation resurges. Financial conditions will be a key determinant of investment and capacity expansion.

External Risks

Geopolitical instability and global demand softness remain critical downside risks. Energy market volatility could further disrupt industrial activity and capacity use.

Structural & Long-Run Trends

Sweden’s shift toward green technologies and digitalization may gradually improve capacity efficiency but requires upfront investment, which is currently subdued. Demographic aging also pressures labor supply, potentially limiting capacity growth.

The November 2025 Capacity Utilization QoQ reading for Sweden signals a cautious industrial environment. The -0.20% decline, below expectations, reflects a complex interplay of monetary tightening, external shocks, and structural shifts. While domestic demand remains resilient, external headwinds and fiscal prudence temper near-term growth prospects. Policymakers and investors should monitor evolving inflation dynamics and geopolitical developments closely.

Key Markets Likely to React to Capacity Utilization QoQ

Capacity utilization data often influence Sweden’s equity, currency, and bond markets. Stocks in industrial and manufacturing sectors typically track this indicator closely. The SEK currency reacts to growth signals, while fixed income markets price in monetary policy shifts. Crypto markets show limited direct correlation but may reflect broader risk sentiment.

• ERIC-B – Ericsson’s industrial exposure links it to capacity trends in Sweden’s tech sector.
• ATCO-A – Atlas Copco’s manufacturing output correlates with capacity utilization shifts.
• EURSEK – The SEK’s exchange rate versus the euro reacts sensitively to industrial data.
• BTCUSD – Bitcoin’s price often reflects risk-on/risk-off sentiment linked to economic data.
• USDMXN – While not Swedish, this pair tracks global manufacturing sentiment impacting Sweden indirectly.

FAQs

What is Capacity Utilization QoQ in Sweden?

It measures the percentage change in the use of Sweden’s industrial capacity compared to the previous quarter, indicating economic activity levels.

How does Capacity Utilization affect monetary policy?

Lower capacity utilization suggests slack in the economy, potentially reducing inflationary pressures and influencing central bank rate decisions.

Why is the November 2025 reading significant?

The -0.20% decline signals emerging industrial weakness amid tightening monetary policy and external risks, impacting growth forecasts.

Key takeaway: Sweden’s industrial capacity utilization shows signs of softening, underscoring the need for cautious policy and market positioning amid uncertain global conditions.