Swedish economic confidence indicator softens further in November

Swedish economic confidence weakened further in November. The domestic economy is indicating softness. The overall Economic Sentiment Indicator fell to 106.7 from October’s 107.6. The indicator is still at a decent level but has been a poor indicator for GDP for the last two years.

Manufacturing sentiment rose in contrast to expectations of a decline. The indicator is more positive than the PMI. Sentiment for private services as well as for construction decline. However, employment plans continued to be at sound levels.

Retailers’ price plans surged, showing that the soft SEK is still impacting consumer prices, which is good news for the Riksbank. Consumer sentiment fell to 97.5, which is a source of worry. Consumers’ inflation expectations were almost unchanged at 3.3 percent in November and stable at 2.3 percent according to the old method.

Overall, the November survey was slightly softer than anticipated, in particularly for the domestic economy.

Therefore, there are some question marks about domestic demand. The central bank might hike rates in December, stated Nordea Bank.