Economic Tendency Indicator shows increasingly weak growth
The Economic Tendency Indicator fell just over 1.5 points in December and has now declined a total of over 22 points since its peak in February 2011. It is considerably below the historic average, indicating weaker than normal growth in the Swedish economy at present. This month the construction industry and the private service sector made a negative contribution to the Economic Tendency Indicator. The indicator for the manufacturing industry remained unchanged, while the retail trade confidence indicator rose a couple of points. The Consumer Confidence Indicator was also unchanged in December.
MANUFACTURING REPORTS CONTINUED FALL IN NEW ORDERS
The confidence indicator for the manufacturing industry was unchanged in December and remains considerably below the historic average. New orders from both the domestic and export markets have fallen over the past few months, while output and employment have remained roughly unchanged. Output volume is expected to remain largely unchanged in the next few months, but industrial firms are planning to reduce employment.
The confidence indicator for the construction industry fell seven points between November and December. However, it remains considerably above the historic average. Output and employment have remained unchanged over the past few months, but tender prices have been reduced. Principally firms in the house building sector report reductions. An increasing number of firms in this sector also report that financial restrictions are the main obstacle to business activities. The construction sector does not forecast any major changes in the next few months. The exception is tender prices, where further reductions are planned.
The confidence indicator for the retail trade rose a couple of points in December, but remains considerably below the historic average. Sales have fallen somewhat and the outcome was disappointing, particularly in the case of the specialist retail trade. On the other hand, the food trade reports increased sales. Despite disappointments, the retail trade is relatively optimistic about the next few months and forecasts some increase in sales volume. However, employment is expected to fall.
The confidence indicator for the private service sector fell six points in December and is considerably below the historic average. Demand growth has slowed substantially over the past few months, but increased demand is forecast for the future. Employment is expected to remain unchanged overall, but the outlook is brighter for consultancy sectors, where further new recruitment is planned.
HOUSEHOLDS EXPECT INCREASED UNEMPLOYMENT
The Consumer Confidence Indicator (CCI) was unchanged in December and is considerably below the historic average. The Macro Index, which measures consumer confidence in the Swedish economy, fell 0.5 points, mainly due to more pessimistic household unemployment expectations one year ahead. The Micro Index, which reflects confidence in personal finances, fell just under one point. This decline is due to more negative household attitudes to consumer durable purchases.
FOR MORE INFORMATION:
Roger Knudsen, Head of Economic Tendency Survey, +46-8 453 59 06, +46-70-491 36 04
Sarah Hegardt Grant, Head of Communications, +46-8 453 59 11, +46-70-267 80 41