Economic Tendency Survey September 2019

Consumers expecting increased unemployment

The Economic Tendency Indicator edged down further from 95.0 in August to 94.6 in September. It has fallen 16.7 points in the past year and has been showing weaker sentiment than normal in the economy for several months.

The confidence indicator for the manufacturing industry rebounded slightly after recent months’ decline, gaining a good point in September. It remains somewhat below the historical average, however, which can be explained by firms’ subdued production plans.

The confidence indicator for the building and civil engineering industry rose slightly in September to just above the historical average. The improvement was due to stronger signals from civil engineers, while the indicator for housebuilders remained in line with the historical average.

The confidence indicator for the retail trade also rose in September and points to a stronger situation than normal. Signals from the motor trade and food retailers were positive, but specialist retailers were slightly more subdued.

The confidence indicator for the service sector fell slightly in September and continues to show relatively weak sentiment. All questions included in the indicator contributed to the decrease. Firms reported that demand has picked up in recent months and that their own operations have improved, but to a lesser extent than normal. Expectations for demand in the coming months were also relatively weak.

The consumer confidence indicator dropped to its lowest since December 2012. The steepest fall has been in consumers’ assessment of the Swedish economy. The macro index has plummeted over the past two months and now shows a much more pessimistic view of the economy than normal. Expectations for unemployment contributed most to the decline.