Economic Tendency Survey March 2019

Service sector cancels out downturn in manufacturing

The Economic Tendency Indicator again changed only marginally, edging down from 101.9 in February to 101.7 in March, and still signals slightly stronger sentiment than normal in the economy.

The confidence indicator for the manufacturing industry fell 5.5 points, moving below 110 for the first time in more than two years. The question that contributed most to the decline was expectations for production over the next three months, which dropped below normal.

The confidence indicator for the building and civil engineering industry gained 1.2 points and is still above the historical average. Both order books and employment plans contributed to the increase, but it is only order books that are keeping the indicator above normal.

The confidence indicator for the retail trade rose slightly on the back of stronger expectations for sales volumes over the next three months. The strongest signals are still from food retailers, whereas specialist retailers and the motor trade are reporting a weaker situation than normal.

The indicator for the service sector jumped 5.1 points in March but is still slightly below the historical average. The increase is due to firms reporting both improvements in their business situation and increased demand for their services in recent months.

The consumer confidence indicator climbed for a second month but is still below the historical average. The increase in March was due to consumers being more positive about their personal finances over the past year. The main reasons why the indicator is below normal are a comparatively negative view of whether now is a good time to make major purchases, and pessimism about the Swedish economy in the coming year.