Economic Tendency Survey May 2023

Consumer and retail indicators up but still weak

The Economic Tendency Indicator climbed 2.1 points in May to 89.4. All sectors contributed to the rise, with the biggest improvement in retail but only a marginal increase in services.

In the business sector, companies report that the number of employees has increased slightly. However, the balance value declined for the second survey in a row and is at the lowest value since March 2021 and only slightly above the historical average. Employment plans rose marginally in May and point to continued new hires. Plans are most optimistic in the service sector, while companies in trade are most pessimistic and believe in a reduced workforce in the next three months.

The confidence indicator for the manufacturing industry rose 1.7 points to 102.9, due mainly to stronger expectations for future production. The proportion of companies expecting selling prices to increase has fallen sharply over the past six months, and firms now anticipate unchanged selling prices over the next three months.

The confidence indicator for the building and civil engineering industry edged up in May. While the civil engineering indicator fell 3.8 points to 110.8, the homebuilding indicator crept up to 96.7.

The confidence indicator for the retail trade climbed 5.6 points to 85.9, but this is still the sector with the weakest sentiment. The percentage of companies that believe that sales prices will increase remains high and decreased only marginally in May.

The confidence indicator for the service sector increased marginally to 90.4, but sentiment varies widely within the sector. A few industries are above 100.0, including IT consulting at 101.3.

The consumer confidence indicator climbed 3.7 points from 65.8 to 69.5 and has gained more than 11 points since bottoming out in October last year. The micro index summarising consumers’ view of their own finances has risen more than 12 points since October, and the macro index summarising their view of the Swedish economy has risen more than 9 points.