Manufacturing industry drives the Economic Tendency Indicator

Price plans decreased within construction and retail trade, remained unchanged in the services sector, and increased slightly further in the manufacturing industry. Manufacturing is now the only sector where price plans are significantly above normal. Price plans measure the difference between the proportion of firms expecting to raise prices and those expecting to lower them. They do not, therefore, measure the magnitude of the expected price increases.

All components of the manufacturing industry confidence indicator strengthened. By far the largest positive contribution came from the question on inventories, where fewer firms than previously report excessive stock levels. Firms’ assessment of order books over the past three months also improved, both in the domestic and export markets.

The confidence indicator for the services sector increased marginally and has remained stable slightly above its historical average in recent months. However, developments differ across service industries. The most pronounced improvement is observed in professional activities, where the confidence indicator has risen for three consecutive months. At the same time, land transport has developed in the opposite direction, with the confidence indicator showing a downward trend since the beginning of the year.

The confidence indicator for construction decreased and now signals weaker-than-normal sentiment. The decline is explained by firms having revised down their employment plans. Employment plans are now in line with the historical average and point to an essentially unchanged workforce over the next three months.

The confidence indicator for the retail trade declined but remains at the highest level among sectors within the business sector. All sub-sectors within retail trade exhibit stronger-than-normal sentiment.

The confidence indicator for consumers increased slightly but continues to indicate weaker-than-normal sentiment. Perceptions of the Swedish economy improved, both compared with twelve months ago and in expectations over the coming twelve months. At the same time, consumers’ plans for major purchases remain significantly more restrained than normal.