Economic Tendency Survey June 2020

Much weaker situation than normal despite improvement in June

One of the effects of the COVID-19 pandemic was a sharp fall in firms' sales. This means that positive signals from firms should be interpreted with care, as the improvement is from extremely low levels.

The Economic Tendency Indicator climbed 10.8 points to 75.2 in June. The sector indicators continued to recover from their record fall in April, thanks mainly to less pessimistic expectations.

The confidence indicator for the manufacturing industry gained almost 13 points in June but is still well below the historical average. Producers of capital goods contributed most to the increase, which was due chiefly to a sharp upward revision of production plans for the next three months.

The confidence indicator for the building and civil engineering industry increased by slightly less than 1 point and still shows much weaker sentiment than normal. Expectations for orders are still very low.

The confidence indicator for the retail trade climbed more than 8 points in June but remains well below normal. As in manufacturing, expectations for future sales volumes were behind the improvement.

The confidence indicator for the service sector rose 8.1 points to 61.8, which is still more than 10 points below its lowest level during the financial crisis. As in May, the improvement was a result of firms being less pessimistic about demand for their services.

The consumer confidence indicator climbed to 84.0 in June, which is still a very low level. All of the questions contributed to the increase, but the improvement was mainly a result of consumers being less downbeat about the outlook for the Swedish economy over the coming year.