Sweden’s overall economic sentiment index rises in November

Sweden’s NIER’s Tendency Survey showed that the nation’s optimistic sentiment continued to be intact in November. The total economy’s sentiment became even more positive. The overall economic sentiment indicator rose to 114.1 in November from 113.4. Consensus expectations were for the sentiment to have dropped 111.9. The November reading is the highest since 2011.

Meanwhile, manufacturing industry’s sentiment rose to 121.9 from 121.2, as compared with consensus expectations of 120.3. Companies’ employment plans in the business sector dropped, but continued to signal strong employment growth.

The consumer confidence index rose to 108 in November from 105.9. This contrasts with consensus expectations of a drop to 104. Consumers’ inflation expectations dropped to 2.3 percent in November from 2.8 percent in October. The old method showed expectations drop to 1.8 percent from the five-year-high reading at 2.1 percent in October.

The construction sector was the only sector that recorded less optimism. However, the sentiment continues to be positive. Retailer’s price plans continued to be modest.

Overall, the manufacturing industry continues to be very positive and households do not appear to be worried about the development in the housing market. The confidence surveys imply that GDP growth will continue to be high in the fourth quarter, in contrast to any projections of a slowdown. The present level of the ESI has historically been in line with an economic growth of about 6 percent year-on-year. But in the past year, the indicator has overrated actual growth, noted Nordea Bank in a research report.

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