Swedish economic confidence eases in May, index falls to lowest since April 2015

Swedish economic confidence eased in May. On a sequential basis, the economic sentiment indicator fell 3 points to 99.8, below its historical average and the lowest since April 2015. The consumer sentiment dropped further in the month to 91. The assessment about household’s own economy fell.

The total business sector’s sentiment eased a notch to 101.8 from 102.3. Meanwhile, manufacturers also became less positive, with manufacturing industry’s sentiment index falling to 103.7 from 107.1. Order intake from export markets and employment are both easing. The confidence index for private services sector stayed the same at 99.3.

Employment plans picked up; however, they still indicate lower employment growth than during the last two years. Price plans of retailers rose and are elevated.

Inflation expectations of households rose to new highs, rising to 3.6 percent from April’s 3.4 percent. Overall, the survey was a mixed bag. Growth is gearing down but inflation indicators are on the high side, noted Nordea Bank in a research report.

“The resilient employment plans are good news. However, the labour market will probably worsen too as GDP growth is slowing. The report doesn’t change much as for the monetary outlook. A rate hike is a long way off”, added Nordea Bank.