Sweden: Economic sentiment dims in May but remains solid
May 29, 2018
The economic tendency indicator declined from 110.4 in April to 108.8 in May, resuming the downward trend which has prevailed for most of this year. Values above 100.0 indicate stronger economic growth than normal, while values above 110.0 indicate much stronger growth than normal.
May’s dip came largely on the back of a sharp deterioration in confidence in the construction sector, on less positive expectations for employment over the next three months. However, with recent figures pointing to a stabilization in the housing market following a decline in prices which began late last year, sentiment could rebound over the coming months. Confidence in the manufacturing sector also dipped slightly but was still elevated, with firms continuing to enjoy plump order books. Confidence in the retail sector improved slightly, while sentiment in the service sector was largely unchanged from April.
Consumer confidence fell for the sixth straight month and is now below its historical average, with consumers less likely to purchase major items and more pessimistic about their personal finances going forward. The decline is likely partly linked to the slump in the housing market.
Author: Oliver Reynolds, Economist