Economic Tendency Survey February 2020

Economic Tendency Indicator climbs to normal levels in February

The Economic Tendency Indicator rose further from 97.3 to 99.1 in February and now points to normal confidence levels in the Swedish economy. The improvement was mainly a result of stronger signals from manufacturers and consumers.

The confidence indicator for the manufacturing industry climbed further after a strong increase in January and has now gained almost 10 points in two months to show a stronger situation than normal. The rise in the indicator can be explained by more optimistic production plans and a more positive assessment of stocks of finished goods.

The indicator for the building and civil engineering industry edged back but remains somewhat above the historical average. Firms’ view of their order books is more positive than normal, but their employment plans are pessimistic and point to a slight decline in the workforce ahead.

The confidence indicator for the retail trade fell 0.8 points from 109.4 to 108.6, but this remains the most upbeat part of the business sector. The most positive signals are from food retailers, while specialist retailers and the motor trade are more subdued.

The confidence indicator for the service sector also fell slightly in February and continues to show weak sentiment. All questions included in the indicator contributed to the decrease. Firms did report that demand for services has picked up slightly in recent months and that their operations have improved, but to a lesser extent than normal.

The consumer confidence indicator increased relatively strongly in February from 92.7 to 98.5, its highest since September 2018, but still points to slightly weaker confidence than normal. The improvement was due to consumers taking a more positive view of their personal finances.