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Booming economy set to cool down

The Swedish economy has entered a slowdown phase, and GDP will grow by 1.5 per cent this year. The economy has peaked, and business investment will fall slightly. Firms and especially consumers have become less optimistic. However, resource utilisation in the labour market will remain high. Wage growth will nevertheless be moderate, and inflation will be below 2 per cent this year. Such are the results of the latest forecast from the National Institute of Economic Research (NIER), published today.Recent years’ strong depreciation of the krona has increased Swedish exporters’ international

Service sector cancels out downturn in manufacturing

The Economic Tendency Indicator again changed only marginally, edging down from 101.9 in February to 101.7 in March, and still signals slightly stronger sentiment than normal in the economy.The confidence indicator for the manufacturing industry fell 5.5 points, moving below 110 for the first time in more than two years. The question that contributed most to the decline was expectations for production over the next three months, which dropped below normal. The confidence indicator for the building and civil engineering industry gained 1.2 points and is still above the historical average.

Manufacturing continues to prop up tendency indicator

The Economic Tendency Indicator climbed marginally from 102.0 in January to 102.4 in February and continues to show slightly stronger sentiment than normal in the economy. It is, however, almost exclusively further strong signals from manufacturing that are keeping the indicator above the historical average.The confidence indicator for the manufacturing industry rebounded somewhat in February after falling for four months and still points to a much stronger situation than normal, thanks to strength in consumer goods, especially non-durables such as foods and pharmaceuticals. The

Broad-based decline in confidence in January

The Economic Tendency Indicator fell for a fourth month from 105.6 in December to 101.9 in January following weaker signals from all sectors otherthan construction.The confidence indicator for the manufacturing industry fell 4 points in January and has dropped no fewer than 10 points in five months. It is still above 110, however, a level that points to a much stronger situation than normal. The decline is relatively broad-based, with most of the subsector indicators having fallen. The confidence indicator for the building and civil engineering industry increased marginally for a

Booming economy set to slow

Most indications are that the Swedish economy peaked in the first half of 2018 and is heading into a slowdown phase, but the output gap will remain positive for the following two years. Investment, especially in housing, has made a major contribution to demand growth but will decrease slightly in 2019. The labour market remains strong, although employment growth is set to slow. Wages in both the business sector and the economy as a whole are expected to pick up slightly. The Riksbank will begin to raise interest rates from early 2019 but only very gradually. Such are the results of the latest

The Economic Tendency indicator holds steady in December

The Economic Tendency Indicator held at 106.3 in December. There was also relatively little movement in the various sector indicators, and they continue to paint a mixed picture. Consumers and the service sector, for example, are more pessimistic than normal, while the signals from manufacturing are still unusually strong.The confidence indicator for the manufacturing industry inched up marginally further in December and was already well above normal levels. Manufacturers remain positive about their order books and anticipate strong production growth in the coming months. The confidence

Strong manufacturing industry props up tendency indicator

The Economic Tendency Indicator fell for a second month in November, from 107.6 to 106.7, but still points to stronger sentiment than normal in the economy, thanks mainly to the manufacturing industry.The confidence indicator for the manufacturing industry climbed slightly as a result of firms being even more positive about current order books, especially in the consumer goods industry. On the other hand, firms were less positive about stocks and revised their production plans down slightly further. The confidence indicator for the building and civil engineering industry fell for the

Consumers expect Swedish economy to worsen over the next year

The Economic Tendency Indicator fell from 111.2 in September to 108.0 in October but still points to a stronger situation in the economy than normal. All sectors contributed to the fall.The confidence indicator for the manufacturing industry dropped for a second month but still shows a much stronger situation than normal. The decrease was due to weaker signals from producers of consumer and intermediate goods. The signals from producers of durable goods, on the other hand, were somewhat stronger than in September. The confidence indicator for the building and civil engineering industry

Swedish economy will peak this year but remain buoyed by external demand next year

The Swedish economy will peak this year, and GDP growth will slow nextyear. Capacity utilisation in manufacturing is at historically high levels, andhousing investment is high as a share of GDP. A strong labour market is alsogood for the households, who can expect wage growth to pick up somewhat. Nextyear, the economy will slow slightly as growth in both manufacturing and housinginvestment falls sharply, but external demand will limit the slowdown. Such arethe results of the latest forecast from the National Institute of EconomicResearch (NIER), published today.Although

Strong rise in retail and service indicators

The Economic Tendency Indicator changed only marginally in September, edging up to 111.7 from 111.6 in August, and continues to reflect much stronger sentiment than normal in the Swedish economy.Only the confidence indicator for the manufacturing industry declined in September, falling 4.5 points, due primarily to stocks of finished goods being considered slightly too high rather than slightly too low. The decrease in satisfaction with stock levels was confined mainly to consumer goods producers, however, and the indicator continues to point to a very strong situation in the industry.

Many reasons for limited wage growth in the current boom

Variables such as resource utilisation, inflation expectations and productivity growth cannot sufficiently explain recent years’ weak wage growth. This year’s Wage Formation Report, published today, analyses a variety of possible explanations for how wages have developed.In the previous economic boom, wage growth in the private sector accelerated gradually to peak at an annual rate of just over 4 per cent. In the current boom, it held below 2.5 per cent until this year. Recent years’ wage growth has been lower than can be explained by productivity growth and inflation expectations. This

The Economic Tendency Indicator up for the third consecutive month

The Economic Tendency Indicator continued to rise in August, from 109.7 in July to 111.5. This level indicates a considerably stronger mood than normal in the economy. This is the third month in a row that the indicator has risen.The strong situation within the manufacturing sector is showing no signs of abating. On the contrary, the confidence indicator for the sector rose further in August. Strongest of all are the signals from companies in the pulp and paper industry, as well as from the transport sector. The confidence indicator for construction and civil engineering operations also

Manufacturing at peak capacity

The Economic Tendency Indicator rose from 108.7 in June to 109.6 in July thanks to further strong signals from manufacturing. The indicator continues to show much stronger sentiment than normal in the economy.The confidence indicator for the manufacturing industry climbed again in July and points to an unusually strong situation. The strongest signals came from pulp and paper and other transport equipment. Firms’ view of their current order books and stocks of finished goods contributed to the increase, as did their production plans over the next three months. The confidence indicator

Investment-driven upturn to peak in 2018

The Swedish economy will peak this year. Next year, growth will slow, due partly to falling domestic housing investment. GDP growth will instead be propped up by burgeoning demand for Swedish export goods. At the same time, firms will continue to have difficulty recruiting workers with the desired skills, contributing to a gradual increase in wage growth. Such are the results of the latest forecast from the National Institute of Economic Research (NIER), published today.Swedish exports will gain considerable momentum during the autumn and continue to strengthen next year, which will boost

Continued optimism in June

The Economic Tendency Indicator edged up from 108.6 in May to 108.7 in June and continues to reflect strong sentiment in the Swedish economy. However, the high level of the overall indicator is due solely to business confidence, as consumer confidence fell for a seventh successive month and is below the historical average.The confidence indicator for the manufacturing industry fell slightly in June but still points to a much stronger situation than normal. The signals are strong across the various subsectors. The decrease in June was due partly to a slight decline in firms’ historically

Sharp drop in construction indicator

The Economic Tendency Indicator fell from 110.4 in April to 108.8 in May but still points to much brighter sentiment than normal in the economy.The confidence indicator for the manufacturing industry continues to show a very strong situation despite falling slightly in May. Firms are happy with the size of their order books and plan to step up production in the coming months. The confidence indicator for the building and civil engineering industry plummeted 8 points in May to its lowest for almost three years, due mainly to less positive expectations for employment over the next three

Manufacturing and construction lift indicator in april

After falling for four months, the Economic Tendency Indicator climbed 1.6 points in April to 110.4, reflecting much stronger sentiment than normal among Swedish businesses and consumers.The improvement was due mainly to even stronger signals from the manufacturing industry. The manufacturing indicator jumped 5.1 points in April, driven by an upward revision of production plans for the next three months and firms being less unhappy about stocks of finished goods. The building and civil engineering industry also contributed to the overall improvement, its indicator climbing for a second

Economy to strengthen further and peak in 2019

The Swedish economy will continue to strengthen, and the global economic upswing will drive up Swedish exports. High capacity utilisation means that business investment will grow rapidly despite housing investment levelling off. Wage growth will accelerate gradually due to large labour shortages, but inflation will not reach 2 per cent until 2020. The Riksbank will not begin to raise the repo rate until the first quarter of 2019. Unchanged personnel density in the provision of public services such as health care and education will require taxes to be raised or benefits cut by just over SEK 20

Consumers less upbeat

The Economic Tendency Indicator fell for a fourth successive month in March from 109.4 to 108.4 but still points to much stronger sentiment than normal in the economy. The decrease was due to a further deterioration in consumer confidence and slightly weaker signals from the service sector.The confidence indicator for the manufacturing industry did not change notably and continues to reflect a very strong situation. Firms’ view of their order books is historically positive, and relatively few are unhappy about excessive stocks. Production plans remain just above the historical average.

Builders and consumers less optimistic

The Economic Tendency Indicator edged down from 110.1 in January to 109.5 in February due to slightly more subdued signals from builders and consumers. The indicator has now fallen for three months in a row, but still points to a much brighter situation than normal in the Swedish economy.Recent months’ decline in the confidence indicator for the manufacturing industry slowed in February. The indicator was almost unchanged from January and points to a very strong situation in the industry. Above all, manufacturers’ view of current orders is much stronger than normal. Production plans for the

Sentiment positive despite weaker signals from manufacturing and service sector

The Economic Tendency Indicator fell from 112.0 in December to 110.2 in January but still points to a much stronger situation than normal in the Swedish economy. The decrease was mainly a result of weaker signals from manufacturing and services. The consumer confidence indicator also edged down, due to a slightly less positive view of the Swedish economy, but consumers’ view of their personal finances improved further.The confidence indicator for the manufacturing industry has fallen relatively far over the past two months but still shows a much stronger situation than normal. The drop in

Strong economy faces increased risks

The Swedish economy is booming. Both output and employment rose rapidly during the autumn, and there is much pointing to a continued upswing. A need for investment abroad means that exports will be an even more important engine for the Swedish economy in 2018.  The strong economy is enabling more and more people to find work. Unemployment will continue to fall in 2018 and will bottom out just above 6 per cent in 2019. Recent months’ decline in housing prices is a major source of uncertainty. Should housing prices fall further and for longer than we anticipate, this could have appreciable

Manufacturing sentiment stronger than normal despite December fall

The Economic Tendency Indicator fell 1.3 points from 113.8 in November to 112.5 in December but still points to much more positive sentiment than normal in the economy. The fall was down to the manufacturing, construction and retail indicators, while the service indicator gained 2.0 points. Consumers’ view of the economy did not change appreciably in December and remains more positive than normal.The confidence indicator for the manufacturing industry fell 4.2 points in December, but is still at very high levels and continues to show a much stronger situation than normal in the sector. The

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