(Bloomberg) --
Swedish manufacturing confidence in March fell the most on record as major companies began closing down production amid the fallout from the coronavirus pandemic.
The purchasing manager's index for the manufacturing sector dropped to 43.2 from a revised 52.7 in February, according to data compiled by Swedbank/Silf. The reading also came below consensus estimates of 46.5.
“The report is much weaker than the headline figure suggests,” Nordea economist Torbjorn Isaksson said to clients, noting that the index for order intakes dropped to 34.0 and delivery times increased due to supply chain problems. He now expects GDP to “‘probably” drop by more than 5% in the second quarter.
This latest data marks a further blow for Sweden's export-reliant economy. On Monday the Swedish National Institute of Economic Research said it expects the country's GDP to contract 3.2% this year versus its earlier forecast of 1.0% growth.
The institute also said there's a need for more measures to curb the increase in unemployment. Sweden's Social Democrat-led government and its coalition partners earlier this week announced new labor market measures after a record 36,800 workers were given notice in March.
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