2016-12-20

Economic Tendency Survey December 2016

Broad-based strength

The Economic Tendency Indicator, which reflects sentiment in the Swedish economy, climbed for a fourth successive month in December to 113.8, which points to much stronger economic growth than normal. The increase was due mainly to a surge in confidence in the manufacturing industry. The services indicator also gained a couple of points, while the retail and construction indicators backed slightly. Consumer confidence was down on November but remains above the historical average.

The confidence indicator for the manufacturing industry jumped 11 points in December to a historically high level. This is a relatively sharp rise from one month to another and can be explained mainly by strong increases in a number of volatile subsectors. A majority of the subsector indicators are above the historical average, however, which signals broad-based strength.

The confidence indicator for the building and civil engineering industry fell 3.2 points in December but still points to a much stronger situation than normal. The decrease was due to firms having a slightly less positive view of their order books and revising down their recruitment plans.

The confidence indicator for the retail trade fell slightly further in December to 101.8. In particular, retailers lowered their expectations for sales volumes in the coming months.

The indicator for the service sector, which has been trending up since June, gained another couple of points in December and is well above normal.

Indicators

 

Max

Min

Oct
2016

Nov
2016

Dec
2016

Change

Situation

Economic Tendency Indicator

117,3

67,1

106,4

108,8

113,8

5,0

++

Confidence indicators:

       

Total industry

118,9

66,9

106,3

108,1

111,6

3,5

++

Manufacturing

121,1

64,0

106,4

110,1

121,1

11,0

++

Building and civil engineering

121,9

78,9

111,5

112,0

108,8

-3,2

+

Retail Trade

124,3

66,3

104,0

103,5

101,8

-1,7

+

Private service sectors

119,2

70,4

105,0

106,5

108,7

2,2

+

Consumer

121,4

45,8

105,0

105,8

103,2

-2,6

+

 
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

 

Oct
2016

Nov
2016

Dec
2016

Change

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

2,0

2,4

2,3

-0,1

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

2,3

2,9

2,8

-0,1

Expected inflation 12 months ahead, median (percent)

1,5

2,0

2,0

0,0

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

    

1 year ahead

2,06

2,06

2,11

0,05

2 years ahead

2,54

2,58

2,61

0,03

5 years ahead

3,39

3,45

3,43

-0,02

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