Economic Tendency Survey August 2020

Economic Tendency Indicator climbs further

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 rose for a fourth month, climbing 3.2 points in August to 87.0. The improvement was due primarily to stronger signals from the service sector. However, the indicator still points to much weaker sentiment than normal in the economy.

The confidence indicator for the manufacturing industry climbed another 1.2 points to 97.7 after recent months’ strong gains. The increase was due to firms reporting a slightly less negative view of their order books and a better stock situation than in July.

The confidence indicator for the building and civil engineering industry also rose in August, but continues to show a weak situation. The improvement was a result of somewhat less pessimistic employment plans.

The confidence indicator for the retail trade climbed just over a point to 98.3. Alongside manufacturing, this is the sector reporting the strongest situation. The rise was due to less negative signals about sales volumes over the past three months.

The confidence indicator for the service sector jumped 6.3 points to 79.6 but remains the most negative sector. The increase was a result of firms being less negative about how their business and demand have developed.

Consumer confidence improved somewhat in August but is still much weaker than normal. The change was due primarily to consumers being less pessimistic about the Swedish economy in the coming year and to their view of their own finances having normalised.