Economic Tendency Survey December 2019

Bleak signals from service sector

The Economic Tendency Indicator fell in December from 94.6 to 93.3 and points to weaker sentiment than normal in the economy.

The confidence indicator for the manufacturing industry fell slightly in December and is below the historical average. Producers of both intermediate and capital goods are reporting a weaker situation than normal. The low level of the indicator can be explained by firms’ relatively low expectations for production volumes.

The confidence indicator for the building and civil engineering industry was almost unchanged and remains slightly above the historical average. It is housebuilders’ view of their order books that is keeping the indicator above 100.

The confidence indicator for the retail trade gained 3.5 points in December and is now well above normal. Both positive signals about sales volumes in recent months and stronger expectations for sales in the coming months contributed to the rise. Sentiment is particularly strong among food retailers.

The confidence indicator for the service sector fell to 91.0 in December, its lowest since 2013. The decline was broad-based, with all of the questions included in the indicator helping to pull it below the historical average.

The consumer confidence indicator rose in December but still shows more subdued sentiment than normal. Expectations for the Swedish economy over the next 12 months remain the main reason for the indicator being below the historical average.