Swedish exporters decry the pain caused by strong kroner
Monday, 29 July 2013
The strong Swedish krona has cost export companies billions in reduced
profits in the past six months. Should the krona continues to get
strengthened further, it may lead to investment shortfall by those
exporter in Sweden in the future.
“If we are talking about a Krona that would be strengthened
significantly relative to current levels, it will of course affect
investment activity in Sweden negatively,” says Anders Rune, chief
economist from the trade organisation – Employers in the Engineering
Industries in Sweden to radio Sweden.
Volvo, Sandvik, Atlas Copco and Scania are some of the companies which
in their interim reports in recent weeks referred to currency effects
as negatively affecting the performance of their businesses. That has
been accounted to reach a whopping several billion in looses
A strong Swedish Krona means that the production costs in Sweden is
increasing, while the prices of the goods produced here will be lower
abroad. Would the kroner gets stronger, it can significantly affect the
companies producing in Sweden. This is said, for example by the
engineering group Sandvik’s CEO Olof Faxander when the interim report
was presented a week ago.
“In the long term, if we see a much stronger position for the krona
that will reduce the competitiveness of our production in Sweden. It
will also affect Sandvik investment decisions. It will be more cost
effective to manufacture products in other parts of the world,” the
company had written in its interim report.
For smaller companies, which cannot move its production, it is even
more difficult, and many see their revenues decline rapidly blamed on
the krona.
As uncertainty persist given that no one know which direction the
currency effect will go, Anders Rune of Engineering Industries feels
that in such an environment characterised by investment plans would
only have to awaits for a while.
by Scancomark.com Team
