Economic tendency indicator still strong

The Economic Tendency Indicator fell from 112.3 in July to 110.7 in August, but remains above 110 and so still points to much stronger sentiment than normal in the Swedish economy. The main reason for the decrease was a fall in the manufacturing indicator. The manufacturing indicator was nevertheless the strongest of the business sector indicators for a fifth successive month and continues to paint the picture of an unusually strong situation in the industry. The retail trade also contributed to the drop in the overall confidence indicator, as did consumers, whose optimism fell back to the historical average.

The confidence indicator for the manufacturing industry fell 3.0 points but remains very high. The decrease was a result of minor changes for all three questions. Firms are still reporting healthy growth in orders, however, and remain very positive about their order books. Their production plans for the next three months are relatively optimistic, and their recruitment plans signal much stronger employment growth than normal ahead.

The confidence indicator for the building and civil engineering industry climbed 4.0 points to its highest since December 2007. The increase was due mainly to firms being even more positive about their order books.

The confidence indicator for the retail trade fell 2.5 points but is still above the historical average. The decrease was due to greater dissatisfaction with stocks and slightly weaker sales expectations.

The confidence indicator for the service sector continues to show a strong situation. Firms remain relatively happy with their business volumes and are more optimistic than normal about demand.

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 indicators are revised each month when the time series are seasonally adjusted. The values will often then move slightly up or down.

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.

Household expectations on inflation and interest rate