Economic Tendency Survey October 2022

Very weak sentiment in the economy

The Economic Tendency Indicator fell 6.2 points in October from 90.8 to 84.6, meaning that sentiment in the economy is now much weaker than normal. All sectors contributed to the decline, with retail and services falling furthest.

The confidence indicator for the manufacturing industry dropped 4.5 points to 105.1 but remains stronger than normal.

The confidence indicator for the building and civil engineering industry also fell but also remains stronger than normal. Builders are deeply pessimistic about the prospects for the construction market over the next 12 months – they have not been this negative about the outlook in the past 30 years.

The confidence indicator for the retail trade dropped 6.7 points to 74.4 and is the part of the business sector where sentiment is currently weakest. The decline in October can be explained by ever more pessimistic expectations for future sales volumes and firms’ assessment of sales in recent months. Current stock levels also contributed to the decline.

The confidence indicator for the service sector fell 6.5 points to 88.1. Two industries that deteriorated particularly sharply were travel agents and hotels/restaurants, where confidence fell almost 15 points and slightly more than 13 points respectively.

The consumer confidence indicator dropped further in October from 52.1 to 48.3. All five questions included in the indicator are low by historical standards, and only the question about the Swedish economy in 12 months is not at the lowest level ever recorded.

The NIER sees a strong need for information on how consumers are being affected by high power prices. Two temporary questions on this subject have therefore been added to the household survey with effect from October. Read more in the latest survey (swedish)