Economic Tendency Survey July 2020

Confidence still low despite improvement in July

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 8.1 points in July from 75.3 to 83.4, but this is still a very low level. All sectors except consumers contributed to the improvement, which was chiefly a result of less pessimistic expectations.

The confidence indicator for the manufacturing industry rose further in July, thanks once again to production expectations. The indicators for both capital and consumer goods producers are now close to their historical averages.

The indicator for the building and civil engineering industry gained almost 3 points as a result of stronger expectations for orders.

The confidence indicator for the retail trade jumped no fewer than 11 points in July, thanks mainly to decreased dissatisfaction with stock levels.

The confidence indicator for the service sector also rose strongly but remains historically low. As in previous months, the improvement was due to a less negative view of the demand outlook.

The consumer confidence indicator fell marginally in July and remains at very low levels. The decrease was due primarily to a more negative view of whether now is a good time to make major purchases, but also to a more negative view of the current state of the Swedish economy.