Economic Tendency Survey June 2019

Business confidence down across the board

The Economic Tendency Indicator fell slightly further in June from 99.4 to 98.1, which is the lowest level since September 2013 and suggests slightly weaker sentiment than normal in the economy. All industries contributed to the fall, while consumer confidence was slightly less negative than in May.

The confidence indicator for the manufacturing industry decreased slightly to around the historical average and thus points to a normal situation. The decline was due to increased dissatisfaction with stocks and a downward revision of production plans. However, firms still consider their order books to be stronger than normal.

The confidence indicator for the building and civil engineering industry fell 1 point to 101.1 in June, which corresponds to a slightly stronger situation than normal. Weaker signals from housebuilders were behind the decrease.

The confidence indicator for the retail trade fell 3.7 points after climbing a similar amount the previous month, and now shows a slightly stronger situation than normal. More subdued signals about sales growth in recent months and reduced expectations for sales in the coming months explain the decrease.

The confidence indicator for the service sector slipped 1.1 points to 98.3 and points to a slightly weaker situation than normal. The decrease was due mainly to weaker demand in recent months. However, firms are still reporting relatively strong employment growth.

Consumer confidence was less negative in June, with the overall indicator gaining 3.1 points but still below the historical average. The questions on personal finances pushed up the indicator, along with the question on major purchases, while consumers’ view of the Swedish economy as a whole pulled in the other direction.