Swedish consumers upbeat about economy, confidence indicator rises to 100.4 in September

Sweden’s consumers are quite upbeat about the Swedish economy. The confidence indicator rose quite significantly in September. It rose 5.8 points to 100.4 from 94.6 in August. However, the indicator still shows that the economic growth is slowing, noted Nordea Bank in a research note. The indicator is in line with a GDP growth of about 2.8 percent.

All the subcomponents added to the headline figure. However, the largest change was in consumers’ expectations for the economy over the next 12 months. Higher manufacturing confidence also helped push up the overall indicator. The business confidence indicator was up 1 point to 105.1, indicating a stronger sentiment than normal. Services and manufacturing made positive contributions, whereas the retail indicator dropped by a tad. Companies in the construction sector continued to record a stronger situation than normal.

As a whole, companies recorded unchanged employment in the last three months. However, there were variations between sectors. Manufacturers registered a drop in employment, whereas companies in the construction, service and retail sectors recorded a rise. Recruitment plans of companies for the coming three months continue to be much more optimistic than normal.

Overall, today’s report is mostly positive news for the Riksbank as it shows that the GDP growth of Sweden is decelerating at a controllable rate and inflation expectations are moving at the right direction. This strengthens the view that there might be no more rate cuts by the central bank, but an extension of the EQ program is possible, according to Nordea Bank.