Economic Tendency Indicator fell for fourth consecutive month
The Economic Tendency Indicator fell just over two points in July and is now nearly four points below the historic average, indicating that growth in the Swedish economy is currently weaker than normal. The construction industry and the private service sector were the sectors of the economy that made a negative contribution this month. The confidence indicator for the manufacturing industry rose a couple of points, while the indicator for the retail trade remained unchanged. Consumers made a positive contribution.
Fall in business sector employment
The confidence indicator for the manufacturing industry rose three points in July and is again just above the historic average. New orders from the domestic market fell, while new export orders and output volume remained largely unchanged. Industrial employment fell somewhat and plans indicate continued cuts. Despite disappointment at the outcome, firms again forecast an increase in new export orders and output volume is also expected to rise somewhat.
Construction activity has weakened rapidly over the past few months and the confidence indicator for the construction industry has fallen just over 30 points since April this year. The indicator fell seven points in July. New orders, construction output and employment declined and firms’ expectations indicate no early improvement in the situation. Construction firms forecast a further weakening in the third quarter and expectations are restrained even in the slightly longer term.
The confidence indicator for the retail trade was unchanged in July on the previous month and remains somewhat below the historic average. As previously, there are major differences between the various sectors, with the food trade reporting the strongest sales growth, while the motor vehicle trade continues to report reduced sales. The food trade and the specialist retail trade are the most optimistic about the third quarter, forecasting appreciable sales growth. The motor vehicle trade forecasts a continued decline in sales volume.
The confidence indicator for the private service sector fell fully 13 points in July and is currently 20 points below the historic average. Both demand and employment remained almost unchanged in the second quarter, which was considerably weaker than firms had forecast. Service firms’ expectations are more restrained this time than previously, but both demand and employment are nevertheless forecast to rise somewhat in the third quarter. Growth is forecast mainly by consultancy sectors and staffing agencies.
Consumers more positive about their personal finances
The Consumer Confidence Indicator (CCI) rose 2.5 points in July and is currently just above the historic average. The Micro Index, which measures consumer confidence in personal finances, rose two points and is again slightly above the historic average. The Macro Index also rose somewhat, but confidence in the Swedish economy remains more negative than normal.
For further information
Roger Knudsen, Head of Economic Tendency Surveys +46-8-453 59 06
Sarah Hegardt Grant, Head of communications +46-8-453 59 11, +46-70-267 80 41