Continued optimism in June

The Economic Tendency Indicator edged up from 108.6 in May to 108.7 in June and continues to reflect strong sentiment in the Swedish economy. However, the high level of the overall indicator is due solely to business confidence, as consumer confidence fell for a seventh successive month and is below the historical average.

The confidence indicator for the manufacturing industry fell slightly in June but still points to a much stronger situation than normal. The signals are strong across the various subsectors. The decrease in June was due partly to a slight decline in firms’ historically strong view of their order books. The indicator was also pulled down by fewer firms reporting insufficient stocks.

The confidence indicator for the building and civil engineering industry bounced back somewhat from its sharp fall in May and points to a stronger situation than normal. It is chiefly firms’ view of their order books that is above the historical average. Recruitment plans for the coming months are at normal levels by historical standards, which translates into largely unchanged employment.

The confidence indicator for the retail trade climbed for a second month in June, as a result of fewer firms reporting excessive stocks.

The confidence indicator for the service sector also gained in June and reflects greater optimism than normal. There were particularly strong signals about demand and business volumes, but firms’ view of how their operations have developed remains somewhat weaker than normal despite a slight improvement in June.