Sweden Defeated The Coronavirus Without A Lockdown – Now Its Companies Are Reaping The Benefits


Progressive critics of the Trump Administration’s response to the coronavirus pandemic like to point to Sweden and portray the Nordic country’s decision to forego lockdowns as a travesty motivated by greed. Such reductive, black-and-white interpretations are inevitably the result of a childlike analysis where every hero needs to have a hero and a villain. But although Sweden’s COVID-19 czar has admitted that he would have changed certain elements of the country’s response if he could go back in time, the country’s decision to skip lockdowns, and keep the country relatively open, has paid off – even if Sweden does have a significantly higher mortality rate than its neighbors (though still lower than all of the worst-hit western European countries).

Sweden’s death-to-infection ratio is relatively high, a reflection of a series of early outbreaks in managed-care homes that led to widespread fatalities among their elderly and vulnerable residents.

And as the US remains engulfed in an election-year debate about how to handle the crisis, and whether mandatory social distancing orders (like mask-wearing mandates) and, if necessary, more lockdowns should be used to fight the outbreak – views differ widely across people of different political orientations. Even Dr. Fauci, who has said some of the worst-hit areas should “think about” imposing stay at home orders if things get worse, has worded his views very carefully so as not to sound like an imperative. But as Q2 earnings season enters one of its most consequential weeks in the US, the FT pointed out in a piece published earlier that Sweden’s biggest companies have beaten analysts’ expectations across the board.

It was supposed to be a terrible start to the summer. As a debate rages in Sweden over whether its lighter-touch approach to managing coronavirus has been the correct course, most European analysts were braced for dreadful quarterly earnings from the Scandinavian country during the height of the pandemic.

But every day for the past two weeks, Swedish company after Swedish company has beaten expectations. From telecoms equipment maker Ericsson to consumer appliances manufacturer Electrolux via lender Handelsbanken and lockmaker Assa Abloy, Swedish companies have delivered profits well above what the market was expecting, even if in some cases that merely meant a less precipitous decline than analysts had feared.

“I have never seen such a high proportion of companies coming in with better profits than expected. It’s almost every company,” said Esbjorn Lundevall, chief equity strategist at lender SEB. The bumper crop begs the question of how many of the positive surprises are due to Sweden’s more controversial approach to managing coronavirus. Unlike the rest of Europe and North America, the country did not have a lockdown and kept schools and many shops and businesses open – a public health experiment that has attracted global scrutiny and drawn both praise and censure. “Keeping society open, schools open, doesn’t mean that we haven’t been hit. But it does mean that we haven’t suddenly not been able to leave our homes. That has undoubtedly helped companies,” Alrik Danielson, chief executive of Swedish bearings manufacturer SKF, told the FT. – READ MORE

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