Sweden; brighter economic picture and U.S. sales outlook result from declines in oil prices and the dollar - Business Outlook Abroad

Business America, July 7, 1986

The major Swedish export industries that offer good prospects for sale of American products are the automotive and high-technology capital goods industries. Since the Swedish industries are under pressure to maintain their competitiveness, despite expected higher labor costs, they will be looking for products which will improve their competitiveness, either through offering higher performance characteristics (improved technology) or by decreasing their costs. In the past, the former has been the important factor in favoring American suppliers. Improved price competitiveness due to the falling dollar should become increasingly important in favoring American companies as new suppliers to Swedish industry.

Good prospects for U.S. exports

The following product areas in Sweden hold good prospects for American exports today and should continue to do so for a number of years.

Considerable opportunities are foreseen for expansion or market entry by U.S. computer companies, which would benefit as much from the indisputable potential of this computer-aware market, as from the respect for American computer know-how. The Swedish market for computers, peripherals, and related office equipment is projected to be over $1.5 billion annually by 1988.

The Swedish minicomputer market in 1985 was worth $427 million. It is expected to grow 14.2 percent in 1986, when annual sales will reach about $490 million. The market for 32-bit super minicomputers will be particularly strong. The microcomputer market is also expanding rapidly and will have annual sales of $364 million in 1986. Multi-user systems will experience tremendous growth, especially the small systems with up to 16 users.

Computer peripheral sales are expanding, especially for storage, input/output, and datacom devices. The market for peripherals is forecasted to grow by about 16 percent a year. Total annual sales should reach $322 million in 1986. The Swedish market for mainframes is healthy and will continue to be so. Its key customers are government, defense, transportation, industry, and commerce. Sales are expected to rise at about 14 percent annually over the next several years.

In computer software, price is becoming important, certainly in the micro sector, but bug-free running, suitability for the task, ease of operation, and good presentation--all associated in Swedish minds with American supply--are important factors at the point of sale. General business systems (e.g., financial planning software) have good sales prospects, as have operating systems, utilities, graphics, and spreadsheets, software which integrates production and general business activities at larger corporations, software facilitating communication between different types of hardware, and software facilitating preventive maintenance of industrial machinery. In all of these, U.S. packages enjoy a high degree of market leadership.

Another profitable market

Medical equipment is a profitable market even though Sweden, like other countries, faces skyrocketing health care costs and has a stringent cost-containment policy. Health care will continue to be oriented away from general hospitals and toward local health care centers. In this way, demand will remain stable for local screening (including X-ray) equipment as well as clinical analytical laboratory equipment. Interest in new techniques for diagnosis and patient treatment, particularly non-invasive methods for biophysical measurements, less harmful means of obtaining anatomical images, and improved drug delivery systems, remains strong.