2017-10-27

Economic Tendency Survey October 2017

Most positive view of demand for a decade

The Economic Tendency Indicator edged down from 113.9 in September to 113.3 in October but still points to much stronger growth than normal in the Swedish economy. The decrease was due to the manufacturing indicator dropping back slightly after its big jump in September. The other business indicators all rose, and consumer confidence climbed to above-normal levels.

While the confidence indicator for the manufacturing industry fell in October, this was from a record high, and the new level of 121.1 is still high by historical standards. Manufacturers remain very happy with their order books, and production capacity has been expanded further. Capacity is still considered insufficient, however, and the main factor limiting production is no longer reported to be demand but shortages of machinery and facilities.

The confidence indicator for the building and civil engineering industry gained 1.2 points and once again shows a very strong situation.

The confidence indicator for the retail trade climbed 1.9 points, due mainly to more positive signals about sales in recent months. The indicator points to a slightly stronger situation than normal in the sector.

The confidence indicator for the service sector, which has long been stable just above the historical average, rose a modest 0.4 points. While employee numbers are reported to have risen relatively strongly in recent months, the proportion of firms reporting staff shortages is the highest since 2003. Shortages of labour are also reported to be the main factor limiting activity in the sector.

Firms expect an inflation rate of 1.3 per cent in 12 months’ time, compared with 1.2 per cent in July, while consumers anticipate inflation of 2.8 per cent, up from 2.5 per cent in September.

Indicators

 

Aug
2017

Sep
2017

Oct
2017

Situation

Economic Tendency Indicator

110,8

113,9

113,3

++

Confidence indicators:

    

Total industry

109,1

110,4

109,9

+

Manufacturing

116,6

124,8

121,1

++

Building and civil engineering

115,0

114,0

115,2

++

Retail Trade

103,0

101,2

103,1

+

Private service sectors

105,6

104,3

104,7

+

Consumer

101,7

101,8

105,3

+


Note.
The standardisation of the Economic Tendency Indicator means that it cannot be calculated as a weighted mean of the levels of the sector confidence indicators.

The indicators are revised each month when the time series are seasonally adjusted. The values will often then move slightly up or down.

The situation is: ++ very strong, + strong, = normal, - weak, -- very weak.

The confidence indicator for the total industry is obtained by weighting the confidence indicators for building and civil engineering, manufacturing, the retail trade and the private service sector on the basis of the number of employees in the population. These weights are different to those used in the calculation of the Economic Tendency Indicator.

The confidence indicator for the private service sector has been estimated for January 1996 to November 2001 on the basis of quarterly series for a limited number of service industries.

 

Household expectations on inflation and interest rate

 

Aug
2017

Sep
2017

Oct
2017

Change

Expected inflation 12 months ahead, mean excluding extreme values (percent)

2,1

2,5

2,8

0,3

Expected inflation 12 months ahead, mean all answers (percent)

2,2

2,8

3,2

0,4

Expected inflation 12 months ahead, median (percent)

2,0

2,0

2,0

0,0

Interest rate expectation, mean excluding extreme values (percent):

    

1 year ahead

2,27

2,25

2,26

0,01

2 years ahead

2,82

2,73

2,74

0,01

5 years ahead

3,70

3,47

3,58

0,11

Planned changes to the consumer survey

From November 2017, the two questions about expectations for housing prices will no longer form part of the consumer survey. From January 2018, the questions about plans to buy a car, purchase a home and make home improvements in the next 12 months will be included in the survey only every third month (January, April, July and October).

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