Economic Tendency Survey January 2016
Strong confidence among firms
The Economic Tendency Indicator climbed 1.6 points from 110.3 (revised) in December to 111.9 in January. This is the second month in a row that the indicator has been above 110, which points to much stronger economic growth than normal. The manufacturing indicator rose strongly, while the building, retail and services indicators fell slightly. All remain at very high levels, however, and continue to indicate stronger or much stronger confidence than normal. The consumer indicator fell back again slightly after improving in December and continues to signal that consumers are more pessimistic than normal. There is still a contrast between their assessment of their personal finances and the Swedish economy, however. The pessimism extends only to the economy, as consumers remain more upbeat than normal about their personal finances.
The confidence indicator for the manufacturing industry jumped from 115.1 (revised) in December to 120.8 in January, which points to a much stronger situation than normal. The rise was due particularly to firms in the capital goods industry being much happier with their order books and stocks of finished goods than in December. Manufacturers’ production plans for the next three months were down slightly on December but still more optimistic than normal.
The confidence indicator for the building and civil engineering industry fell from 112.8 (revised) in December to 110.3 in January but still points to a very strong situation. The decrease was due to a slight reduction in firms’ highly optimistic recruitment plans for the next three months, but they remain well above the historical average. Firms’ view of their order books did not change appreciably and remains much more positive than normal.
The confidence indicator for the retail trade fell 1.5 points to 114.4 in January but still signals a much stronger situation than normal for a sixth successive month. All three questions contributed to the decline in the indicator. Sales growth over the past three months was slightly down on the level reported in December, expectations for sales volumes over the next three months were slightly less optimistic, and firms were also marginally more negative about current stocks of goods.
The confidence indicator for the private service sector dropped 1.8 points from 106.3 (revised) in December to 104.5 in January. The decrease was mainly a result of expectations for demand over the next three months being slightly less positive, but they remain more optimistic than normal. The proportion of firms stating that their operations have improved over the past three months was largely unchanged, as was the proportion of firms reporting increased demand. Both proportions remain slightly above the historical average.
The consumer confidence indicator fell 1.1 points in January to 97.5, a level signalling that consumers remain more pessimistic than normal. The fall was due partly to a decline in consumers’ expectations for their personal finances over the coming year, and partly to a lower proportion believing that now is a good time to make major purchases. Consumers’ view of the current state of their personal finances did not change appreciably and is still more positive than normal. They remain pessimistic about the Swedish economy, but slightly less so than in December.
Economic Tendency Indicator
Building and civil engineering
Private service sectors
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
Expected inflation 12 months ahead, mean excluding extreme values (percent)
Expected inflation 12 months ahead, mean all answers (percent)
Expected inflation 12 months ahead, median (percent)
Interest rate expectation, mean excluding extreme values (percent):
1 year ahead
2 years ahead
5 years ahead