Swedish economy recovering slowly

The Economic Tendency Indicator has not changed notably over the past five months but has oscillated around the historical average. July saw a decrease of 0.9 points to 100.4 from 101.3 in June, due primarily to the services indicator falling 2.2 points and the consumer indicator 1.4 points. The building and civil engineering indicator also decreased slightly, while the manufacturing and retail indicators increased somewhat.

The confidence indicator for the manufacturing industry climbed 0.6 points in July and is now 1 point above the historical average. Two of the three questions included in the indicator contributed to the increase: the assessment of current order books was more positive and production plans were revised up, while the assessment of current stocks of finished goods was slightly more negative.

The confidence indicator for the building and civil engineering industry fell 0.7 points in July and is now slightly less than 5 points above the historical average. Both of the questions included in the indicator made a negative contribution: the assessment of current order books was more negative, and employment plans were revised down slightly.

The confidence indicator for the retail trade gained 0.4 points in July and is now no fewer than 10 points above the historical average. Two of the three questions included in the indicator made a positive contribution: historical sales were somewhat better, and expectations for sales in the coming months were revised up, while the assessment of stocks of goods was less positive.

The confidence indicator for the private service sector dropped 2.2 points in July, which means that it has fallen around 10 points since its most recent peak in January this year and is now below the historical average for the first time in 11 months. Two of the three questions included in the indicator made a negative contribution: historical demand and firms' assessment of how their operations have developed were less positive, while expectations for demand in the coming months were unchanged.

The consumer confidence indicator fell 1.4 points in July and is now largely in line with the historical average. Households were more negative about their personal finances than in June but slightly more positive about the Swedish economy.

Indicators

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.

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 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.