Economic Tendency Survey July 2022

Gloomy households but strong sentiment in business sector

The Economic Tendency Indicator fell 4.4 points in July from 105.7 to 101.3, which is close to normal. As in June, all sectors other than construction contributed to the decline. The consumer and retail indicators both dropped more than 10 points, the consumer indicator from an already record-low 66.5 to 54.1.

The confidence indicator for the manufacturing industry fell 1.2 points to 119.4. This was a result of stocks of finished goods not being considered to be as low as before, partially offset by more optimistic expectations for production volumes in the coming months.

The confidence indicator for the building and civil engineering industry was the only indicator that did not weaken in July. The indicator for civil engineering climbed relatively strongly, while the homebuilding indicator was unchanged.

The confidence indicator for the retail trade slumped 10.6 points to 92.8, due mainly to ever weaker expectations for future sales volumes. Current stock levels and firms’ view of sales in recent months also contributed to the decline.

The confidence indicator for the service sector fell a moderate 1.4 points to 105.4. Two industries where the indicators deteriorated sharply were hotels/restaurants and travel agencies, both dropping more than 10 points from June.

The consumer confidence indicator sank further from 66.5 to 54.1. The indicator is thus significantly lower than the historical average and the lowest ever since the start in 1996. The micro index summarising consumers’ view of their own finances plunged 17.3 points to 47.5, while the macro index summarising their view of the Swedish economy as a whole fell 4.0 points to 79.3.