In the mid-1990s, industrial production in Sweden gained momentum again after a weak period in the 1970s and 80s. Production increased quite considerably up until the financial crisis hit in 2008.
The chart above illustrates the historical development of industrial production in Sweden since 1913.
The increase in industrial output starting from the mid 1990s up to 2008 was driven by, among other things, a strong growth in Swedish exports. The starting point for the increase in exports was the devaluation of the Swedish currency, the Krona, in 1992. As the Swedish currency dropped in value compared to other currencies, Swedish products became less expensive on the international market. Another important factor behind the strong Swedish development is the sharp increase in productivity of many Swedish industrial sectors. Improved productivity causes products to become more competitive on the international market.
The sharp fall in industrial output in 2009 is a direct effect of the financial crisis and the subsequent recession. Sweden, and Swedish exports in particular, was among those suffering most severely from the dramatically reduced demand for industrial products.