Sweden’s retail sales fall in sequential terms in July

Sweden’s retail sales declined more than consensus expectations in July in sequential terms. According to Statistics Sweden, retail sales fell 0.9 percent month-on-month. This is lower than consensus expectation of 0.2 percent growth and a decline from June’s -0.7 percent. This was the second straight drop in a month. However, a softening of this data was in the pipeline.

Retail sales’ short-term indicators have in general deteriorated in recent month, and along with decelerating housing market, this should bring down growth in retail sales, said Nordea Bank in a research note. On a year-on-year basis, however, retail sales grew slightly by 1.1 percent in July. But it was still lower than the consensus expectations of 2.5 percent and from June’s 3.9 percent.

Meanwhile, the country’s trade balance in July came in at SEK 0.5 billion, quite close to the SEK 0.4 billion recorded in July 2015. Both imports and exports, in terms of current prices, dropped 4 percent year-on-year. The low outcomes might partly be because July 2016 had two less working days than July 2015. This usually weighs more on exports than imports.

However, the trend in both imports and exports has been subdued in recent months. Also, the trade balance for the second quarter was downwardly revised. This might suggest a downward revision to the second quarter GDP outcome later on, according to Nordea Bank.