Economic Tendency Survey: Rise in Economic Tendency Indicator

The Economic Tendency Indicator rose somewhat in February for the first time in nine months. It increased nearly 1.5 points, but remains considerably below the historic average, indicating that growth in the Swedish economy is still weaker than normal. The construction industry was the only sector of the economy to make a negative contribution to the indicator this month. The other sectors made a weak positive contribution. The Consumer Confidence Indicator declined in February.

Plans indicate unchanged employment in business sector

The confidence indicator for the manufacturing industry rose one point in February and remains considerably below the historic average. New orders have fallen further over the past few months, mainly from the export market, and the order situation is weaker than normal. Output volume has remained almost unchanged and there is some optimism about the next few months. Industrial firms forecast an increase in industrial output, but employment is expected to continue to fall.

The confidence indicator for the construction industry fell fully 18 points in February. It is now only a couple of points above the historic average. New orders have declined and dissatisfaction with order books has increased. The situation is weakest in the house building sector, which also has significant problems financing its business activities, with one in three firms reporting financial restrictions as the main obstacle to activities. Construction firms forecast largely unchanged new orders and employment for the next few months. However, tender prices are expected to fall further.

The confidence indicator for the retail trade rose three points in February, but remains considerably lower than the historic average. Overall, sales have remained largely unchanged, but there are considerable differences between the different sectors, as previously. The food trade reports continued strong growth, while the specialist retail trade reports reduced sales. The retail trade is relatively optimistic about the next few months and forecasts increased sales. The food trade is the most optimistic sector, but the other sectors also forecast growth.

The confidence indicator for the private service sector rose one point in February, but remains considerably below the historic average. Both demand and employment have remained largely unchanged over the past few months. Service firms forecast some growth in both demand and employment for the coming months. The consultancy sectors are the most optimistic, as previously.

Households anticipate lower home loan rates

The Consumer Confidence Indicator (CCI) fell back just under two points in February following the strong recovery the previous month and is considerably below the historic average. Households are somewhat more pessimistic than last month about both their personal finances and the Swedish economy. Expectations of the variable home loan rate one year, two years and five years ahead have been adjusted downwards by around 0.4 percentage points.

For further information:

Roger Knudsen, Head of Economic Tendency Survey, +46-8 453 59 06, +46-70-491 36 04
Maria Billstam, Economic Tendency Survey, +46-8 453 59 04
Torbjörn Lindquist, Economic Tendency Survey, +46-8 453 59 52
Sarah Hegardt Grant, Head of Communications, +46-8 453 59 11, +46-70-267 80 41