The Economic Tendency Indicator rose in July

The Economic Tendency Indicator rose to 102.7 in July, compared with 101.6 in June. This is the third consecutive month in which the indicator has exceeded the historical average, so indicating slightly stronger growth than normal in the Swedish economy. All trade sectors, with the exception of retail, are playing a part in the upturn. Consumers´ confidence in the economy has declined further.

The manufacturing industry is reporting a slightly stronger situation than normal, and the confidence indicator has increased to 103.7 in July compared with 101.8 in the previous month. Of the three subcomponents, two improved. Companies are less negative about the size of their stocks of finished goods than was the case in the previous month, and production plans for the coming three months have been adjusted upwards slightly. The overall assessment of the industry with regard to the size of order stocks has worsened slightly compared with last month.

The confidence indicator for the building and civil engineering industry rose by 3 units in July after having fallen for two consecutive months. The indicator amounts to 105.3, which indicates a stronger situation than normal. Both questions in the indicator contributed to the upturn. Construction companies are less negative about the size of their stocks than last month, and employment plans for the coming three months have been adjusted upwards.

The confidence indicator for retail trade certainly fell slightly between June and July, from 109.8 to 107.5, but despite this the position remains strong. All three components in the indicator contributed to the downturn. Companies are reporting slightly weaker sales outcomes than last month, and expectations for forthcoming sales development have been adjusted downwards slightly. Despite this, the net figures for both questions are well above the historical average. The stock reviews are also contributing to the downturn in the confidence indicator, but with only a marginal deterioration compared with last month.

The confidence indicator for the private service industries amounts to 103.5 in July, representing an increase of 1.0 unit compared with June. This upturn is explained by the fact that service companies are more optimistic about the development of demand three months from now. The two other subcomponents deteriorated slightly compared with last month. Demand for companies' services has certainly increased, but to a slightly lesser extent than last month. Opinions on the development of companies' own activities have deteriorated to a marginal extent.

Consumer confidence in the economy declined for the second consecutive month and the confidence indicator fell to 96.4 in July, compared with 97.6 in June and 99.2 in May. Of the five subcomponents, three deteriorated. Consumers´ opinions of their own finances and the Swedish economy at present were slightly weakened. However, opinions of consumers' own finances are still more positive than normal. The already pessimistic expectations in respect of the Swedish economy twelve months ahead fell still further, but only marginally. Expectations of consumers' own finances over the next year remain unchanged, just below the historical average. Consumers' opinions of whether this is the right time to buy capital goods improved slightly, and this is the only one of the five questions in the confidence indicator which makes a positive contribution in July.

Indicators

Note. The standardisation of the Economic Tendency Indicator means that it cannot be calculated as a weighted mean of the levels of the sector confidence indicators.

The situation is: ++ very strong, + strong, = normal, - weak, -- very weak.

The confidence indicator for the total industry is obtained by weighting the confidence indicators for building and civil engineering, manufacturing, the retail trade and the private service sector on the basis of the number of employees in the population. These weights are different to those used in the calculation of the Economic Tendency Indicator.

The confidence indicator for the private service sector has been estimated for January 1996 to November 2001 on the basis of quarterly series for a limited number of service industries.