Interviews with 42 of Sweden's largest companies indicate that economic activity is at a "standstill," with development still hampered by the slow recovery in Europe, according to a survey by Sveriges Riksbank.

A combination of low global demand and stiff competition has led companies to try to cut costs to increase margins and profitability, the Riksbank notes.

"Many companies are also devoting considerable resources to developing more efficient working methods and production processes, for